Could Virtual Taxes be that far off?

My husband and I were separated for all of 1999, but we each paid half of the mortgage payment. I lived in the house, but both our names are on the mortgage papers. We are filing separate tax returns. Can the interest deduction be split or can only one of us claim the deduction? C.M.

Assuming you and your husband are both liable on the mortgage loan, and one of you is still occupying the house, you are each entitled to take your share of the deduction, based on how much of the loan interest you each paid.

I got my driver’s license suspended for eight months last December. I lost my job because of it. Can I claim that loss in my taxes at the end of the year? For example: $9 per hour times eight hours per day = $72.00 times 5 days per week = $360.00 times four weeks per month = $1,440.00 times eight months = $11,520.00. L.R.

I have to commend you on your creativity. If we could all take deductions for the income we feel we’re entitled to earn, there wouldn’t be nearly so many complaints about the tax laws. And I don’t mean to make light of your situation, even though this is supposed to be a “Fun With Taxes” column.

Unfortunately, you probably already know the answer to your question, which is that you are not eligible to take a deduction for your lost wages. You may not, however, understand the reasoning behind that answer, so let me explain.

The taxes that we pay are based on a percent of the money that we earn and otherwise receive, and these taxes represent our personal share of the cost of performing duties that we, as voters, have delegated to our various government units. (I might add here that some of these duties for which our taxes pay include the duties performed by the law enforcement authorities who suspended your license…).

The deductions that are allowed on our tax return fall into three general categories:

•  Deductions for expenses that help us generate taxable income, such as the cost of tools and uniforms you use in your job, the cost of resumes and job search services (you might find this one particularly useful), the cost of interest paid on money borrowed for investments which earn taxable interest and dividends, certain costs of relocating to take a new job, and the cost of gambling (the deduction for this is limited by the amount of money you actually win at gambling).

•  Deductions for basic living expenses, including medical expenses, housing (but only if you own your home, and then only the interest and taxes paid on that housing), and some of the taxes you pay. You might notice the deductions for basic living expenses don’t include things like food and clothing. If only the grocery and sewing lobby groups were as effective as the gambling lobbyists. In a perfect world you would be able to take a deduction for food you buy but only to the extent that you actually eat it (food left on your plate must reduce your deduction). And clothing would be deductible, but only if you wear the clothes for more than one season – passing fads and trendy styles probably wouldn’t be considered basic necessities…

•  Deductions for charitable contributions. Many costly studies (funded no doubt by tax dollars) have proven that people are more likely to donate money, inoperable toasters, and used blue jeans to charities if they get a tax deduction. There haven’t been enough extra tax dollars to fund a study to find out if people would be likely to donate money to charities if their taxes were lower and they actually had more money kicking around. Before the government can fund the test of this theory, they will have to raise our taxes.

So you see, there’s no place among the three major categories of deductions for a deduction for wages you didn’t receive. You can be glad, I suppose, that none of that money you should have earned will be subject to taxes. Imagine the IRS assessing taxes based on what they think you ought to earn – then leaving it up to you to figure out how to earn that money. Aren’t you glad you live in a society where taxes are so fair?

One final comment. While on the subject of our taxes being used to fund various government programs, remember that there are many programs available that can help ease the financial crisis confronted by people who are temporarily unable to work. There are also non-government sources of help through churches, neighborhood associations, and soup kitchens, thanks to the generous, tax-deductible, contributions that taxpayers make.