Makes more sense than it might seem, since when you pay all those bills, that's usually taxable income to the recipient. So if it isn't a write off, taxes can be paid many times on the same item.
this post was submitted on 02 Mar 2026
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My CPA always reminds me, US tax laws are not written for us.
That is basically why the Standard Deduction exists.
I dunno how it works in the US but in Aus I can't deduct anything unless it's related to work, apparently feeding and housing myself doesn't contribute to that ..
In a lot of places a part of your income is exempt from taxes (eg brackets where you pay 0-20k @ 0%, 30-60k @ 30%, 60-100k @ 40%, 100k+ @ 50%; then your first 20k is not taxed), i think this is what they are talking about.
Edit: another possibility would be they do mean actual expenses, just reminded you can (partially) deduct education expenses from your taxes in the Netherlands.
Standard deduction is slightly different than an exemption. You're deducting a set amount (instead of itemizing it, which only makes sense to do if the total is more than the standard deduction, which it won't be for most professions).
An ~~exception~~ exemption would be removing a portion of the taxable income before it is taxed.
Pretty similar outcome for most people, but still an important distinction.
Edit: fixed autocorrect error
I guess you could argue that that's the reasoning behind the progressive tax regime. Australia's progressive tax lines up with the low end of that but if you were going to claim that the tax free threshold was to cover general living expenses then it's going to need to be a lot larger, 20k bere is not enough to cover rent, food and utilities here, a 3x2 near Perth is like $800/week for rent and I would argue interest on a mortgage is comparable and Perth is on the cheap end of Australian cities. That's like 40k without utilities and food. So either the tax free threshold was poorly implemented without indexation against inflation and cost of living or the driver of it isn't to cover basic cost of living and is more to ease the burden on the poor end of town. I guess you could say it's a little bit of both but arguably indexation should be implemented.
True, and perhaps credible for a married couple with a 31k deduction, but the 15k deduction for an individual might be a bit rough for single folks.
It’s complete bullshit. What city can you rent an apartment for 15k/year even with roommates?
Depends on what you define as a city. A quick search of a random city (Saginaw, MI), I see some 2 bedrooms for 985 a month.
Of course people from LA might not call that a city, but, to people from towns of 800 people, it is huge at about 44k people.
Some states allow you to deduct a portion of your property taxes, including renters (a set % of your rent). On top of the standard deduction.
From State tax, but that's still not related to the federal deduction, where it only kicks in you itemize.
However while you may not be able to deduct your property taxes if you own a house with standard deduction, you do get to if you are a landlord regardless of standard deduction.
I'm very lucky, I rent half a house for under $10k a year in a city. But I also manage the property.
It doesn't really make a difference if both parents are working and make similar amounts. Then that part is no different from filing separately.
Point is a couple shares rent. A couple's residence is unlikely to be twice the cost of a single residence, unless you have roommates. So 30k for a couple guess further than 15k living alone.
Exactly. It’s to incentivize one person to be a bread winner and one to make less and be a home maker (or something with less hours) so you get the tax benefits. It would be a nice system if expenses weren’t so damn high.
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But if I itemize instead, I can't count those things.
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But then again, groceries and rent would go way up because they'd anticipate that, and instead of funding public spending that benefits everybody you'd give even more money to greedy capitalists.
I wrote a free spec script for a charity organization, enabling me to write off ~$50k in charitable donations for putting in a few hours of work.
Everyone should be looking for loopholes and ways to prevent the US government from getting their money.
I asked a CPA about this idea a couple months ago and was told that it doesn't work that way, and everything I can find on the internet backs that up. Can you provide a source saying otherwise?
I'm gonna agree with you. If OP gets audited, this will not hold up. OP cannot deduct money for a service that the charity pays nothing for. Only unreimbursed or out of pocket expenses can be deducted this way
If OP gets audited, this will not hold up.
The IRS actually already did look it over. They decided (rather arbitrarily) that the script I donated was worth ~50,000 instead of ~70,000 as I was trying to claim. Definitely not a full audit, but they already reviewed it at some level and it passed muster.
Right because you're donating intellectual property which is property. And that distinction is fucking nonsense but here we are. I doubt a full audit would allow market prices to survive on that though. They'd be like "hey now, this didn't cost you that." But to do a full audit we'd actually have to fund the IRS. Good luck getting that to happen.
They’d be like “hey now, this didn’t cost you that.”
But would not that depend on how OP's time is valued in this case? OP could argue that their expertise costs $14000/hour ($70000 over 5 hours). I am sure that they would argue the hour cost, I have not clue how the IRS handles something like this.
They don't let you deduct the cost of your own labor ever. The property thing is the loophole (but after further research not a real loophole and they will nail you for it).
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This has “I….DECLARE…..BANKRUPTCY!!!” vibes.
You sound like every business man ever.
You must learn from your enemy to defeat them.
I intend to pass the loophole my parents gave me to my children, really grateful for it
Homeowners can write off the interest paid towards their mortgage. Renters can't write off shit.
If we have enough deductions to justify itemizing instead of taking the standard deduction.
I haven't had a need to itemize in several years.
That's not nearly as much of a perk as people make it out to be. It's good for a couple of years when you're mostly paying interest, but it's really not much.
Remember, a deduction is just removing the expense from your taxable income. It's not like we get that back from taxes...that'd be a credit.
So if I pay $5000 in interest over the course of the year, im not getting $5k back on my taxes. We just pretend my gross income is $5k less. And most the time, the standard deduction ends up being more anyway.
Most W2 workers take standard deduction. You aren't missing anything.
My primary income is W2, but I have a 1099 side gig (teaching scuba and underwater photography at a university) that usually results in me itemizing mostly because my gear is stupid expensive and I rarely make an actual profit. The write-offs are enough to let me justify spending the money on the gear to help me break even while teaching.
I do multi-year write-offs on the big-ticket items, because one underwater camera rig (camera, housing, strobes, wet-lenses, etc) costs what I make teaching underwater photography across 4-6 semesters.
It’s by design, and in theory meant to encourage ownership to put personal stakes in the region. In practice, of course, homes are laughably unaffordable and it’s a free bonus for the rich.
In the US maybe, not that's not a universal thing.
I've tried writing everything off, but it's always been less than the standard deduction.
Where are you from?
I can file a lot of the bills for my flat (e.g. things like repairs and facility service) at the tax office, as well as stuff like child care and most of my car's mileage (or my bike's mileage :-) ), to be exempted from income taxing at least (there are still other taxes).
Rent money would be fully taxed, though, as well as other cost of living like food and clothing.
Country is Germany.
Businessmen don't get to write off their living expenses either, but feasibly you could start a business and become a contractor for your employer so you could write off things like footwear, home office square footage, and a standard deduction per mil driven between two work locations.
Best part is the ~~(Canadian?) IRS?~~ CRA will never audit you unless they have the staff and they can get more out of you than the cost of the audit (roughly 20k minimum).
I know a guy who started a business just to throw parties for his friends. He’d take a cover charge at the door and buy booze tax free and make sure to never turn a profit.
Got by with a banquet license which is like $8 for the night.
I knew a retired carpet cleaner who occasionally did that. He wasn't wealthy by any means but if he was going to owe more than 3k in Taxes it was always better for him to spend it on a "business trip".
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If corporations are people now then why do the get away with not paying the federal income tax?
Things you buy for work are also tax deductible, it’s more noticeable for businesses since they don’t generally make employees pay business expenses.
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