Income the IRS can’t tax (yet).
Posted by: TammyI noticed an article on MSN about 8 ways to things the IRS can’t tax or something like that. Go figure that it was so popular that the server was too busy to open it up and then the page seemed to go down. LOL! BUT this article got me thinking about how all that “income” I created as a frugal person. No, I didn’t make money that I didn’t report to the IRS (illegal is NOT good) but I DID stretch my dollars so much so that it was like having an extra income.
Still not wrapping your brain around this? Well, when you can use all of your frugal skills to make your $40,000 income do the work of $60,000 then you just “made” $20,000 that the IRS can’t tax you on! This isn’t as far fetched as it seems. When I can take my coupons and a CVS flier and get nineteen tubes of toothpaste, 6 deoderants and 6 shampoos for a mere $3 (or less) than I just “made” about $30 (I remember the toothpastes were $1 each and I got them all for free with coupons and the shampoo and deoderants were originally on sale for $1 apiece before coupons).
If I were to take my $3 and miraculously find an investment medium that could turn it LEGALLY into $30 in less than 60 minutes (about the time it took me to cut coupons, match up coupons to the flier and do my shopping) then the tax code would dictate that I’d have to claim the $27 “gain” on my taxes. Frugality and our ability to create a gain on our “investment” of time and a few dollars is something that we aren’t taxed on(yet-maybe we shouldn’t share our money “making” tips so readily or someone will figure out how to tax it!)
How can you invest your time and money to have a free gain? Couponing? Gardening? More Make Your (MYO) goodies? Less eating out and more eating in? Food for thought, isn’t it? Or, should I say cash for thought?
Well, MSN got the article link fixed so I thought I’d update my blog entry with the link:
http://articles.moneycentral.msn.com/Taxes/CutYourTaxes/8TypesOfIncomeTheIRSCantTouch.aspx
- Tags: income IRS can't tax