So, I'd planned to do a special tax day edition on the 15th (which I still will) but I need to share this perfect example of how the middle class is effed-over.
I'm actually working on our taxes right now via TurboTax (the best way, IMO but more on that on the 15th).
In April of 2008 our house was broken into. To add insult to injury, a local news station called this particular serial burgular "The Gentleman Burgular" because he was said to bring back items he thought were sentimental and leave them at the front door overnight.
Needless to say, this guy did not bring any of my stuff back and since he stole mostly jewelry and most of my jewelry was sentimental I don't see how he's a "Gentleman."
So, what does this have to do with taxes?
One can write off the items not recovered and not covered by insurance (note to self, add a separate jewelry policy to keep this from happening again).
According to the police report (which is incomplete, by the way) the total losses were $4635. The total value for the recovered items was $1260. Incidentally, the insurance company had replaced pretty much all the items that were recovered and of course the items recovered were not the massively sentimental items I'd hoped for.
So, in theory I have $3375 that I can write off.
Except that $3375 isn't more than 10% of our adjusted gross income. We'd have to have an AGI of $33,750 or less to qualify.
The lesson here... either become dirt poor before someone steals your stuff or have even more stuff stolen. This is a crappy IRS rule. Being violated in such a way that things are taken from you and from your home hurts emotionally and financially no matter your AGI.
Grrr.
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I don't really see how this is a middle class problem, though. You would assume that as your net worth increases/decreases so would follow the net worth of your possessions. So the lower class and upper class would also have this 10 percent problem.
ReplyDeleteI agree... it's not necessarily a middle class problem. But it still stands that your financial situation shouldn't be factored in to this IRS deduction. Already, if you're taking the standard deduction it wouldn't matter but if you're already itemizing it would be nice to be able to tack on a bit more. In our case we would either have to make a lot less money or have had a lot more stuff stolen. Sucks for anyone no matter their financial situation.
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