Hello folks from Orlando!
As I wrap up the final day of the Tax Rep Summit and prepare for my 5.5-hour flight back to my family in San Diego, I want to share something that might surprise you about the IRS.
Here’s a truth that often shocks my clients: The IRS doesn’t actually want to bankrupt you or put you on the streets.
I know, I know. It might not feel that way when they empty your bank account without verbal warning. But here’s the thing – once you decide to become compliant, the IRS has a whole system of allowable living expenses they’ll let you claim before determining how much you can pay.
Let’s break down what expenses the IRS will actually let you claim:
- Housing and Utilities
- Rent or mortgage payments
- Property taxes
- Insurance
- Gas, electric, water
- and more
- Pro Tip: These allowances vary by county and family size. San Diego’s housing allowance is significantly higher than many other regions.
- Transportation
- Car payment (up to a reasonable amount)
- Gas and oil
- Insurance
- Maintenance
- Public transportation costs
- Insider Knowledge: The IRS even allows ownership of two cars per household!
- Food and Clothing
- Groceries
- Personal care items
- Apparel
- Services (like dry cleaning)
- Strategy Note: These are based on national standards, not your actual spending.
- Healthcare
- Insurance premiums
- Out-of-pocket medical expenses
- Prescriptions
- Key Point: Medical expenses are often allowed in full if documented properly.
- Other Expenses That Often Get Approved
- Child care
- Term life insurance
- Court-ordered payments
- Student loan minimum payments
- Some retirement contributions
But here’s where it gets interesting…
Just knowing these categories isn’t enough. The real skill comes in knowing:
- How to document each expense properly
- When to argue for expenses above standard allowances
- Which expenses can be combined or separated for maximum benefit
- How to time your financial statement for optimal results
For example, last week I helped a client become declared “Currently Not Collectible” by properly documenting their San Diego housing costs and medical expenses. The IRS revenue officer initially pushed back, but because we knew the rules inside and out, we prevailed.
Think of it this way: The IRS is like a strict parent with very specific rules about allowances. They’ll give you your allowance – but only if you ask correctly and follow their procedures.
Ready to Stop Worrying About the IRS?
Option 1: Download my free guide at CrushIRSAnxiety.com to learn more about how to handle your IRS issues, including a detailed breakdown of allowable expenses.
Option 2: Email me at info@andrewsamaniego.com to schedule a consultation. Let’s review your specific situation and create a strategy that works for you.
The Bottom Line:
Don’t let the IRS determine what you can and can’t afford without understanding your rights. Just like I’m heading home to my family in San Diego, you too can find your way back to financial peace of mind.
P.S. – The IRS’s allowable expense guidelines change regularly. The sooner you act, the sooner we can put together a plan that works for your situation.
Until Next Time,
Andrew “Home-bound” Samaniego, EA, CTRC
Andrew Samaniego Tax Planning & Resolution
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