[Originally published April 17, 2012.]
1. Ward care expenses
A taxpayer with a child who qualifies as a dependent can deduct from adjusted gross income monies paid to a child care provider. If you are a lone crusader, then this deduction is not available to you—but if you have a sidekick, then consider making him or her your legal ward. (This is not quite as easily done as said, however. A ward, legally speaking, must be (1) a minor (2) without parents. Therefore, if you are looking to take this deduction in a future year, when you select your next sidekick choose someone very young and completely orphaned to maximize the benefit.) The expenses deductible will be those for professional services rendered—before- and after-school care and day camps, for instance. (Not deductible are the costs associated with sleep-away camps or ransom monies paid to a nemesis to secure a hostage sidekick’s release, no matter how well your dependent is treated in your archenemy’s lair.)
2. Medical expenses
Unless you are indestructible/immune to all harm… or else the kind of absurdly wealthy superhero who has a live-in physician (or personal gentleman with field medical training) on staff—or you, yourself, are styled Doctor [Something]—you probably spend no small amount of time in hospitals, or at least at ambulatory clinics, getting stitches and tetanus shots and generally being put back together and readied to return to the streets. Save your receipts. Your medical—and dental—expenses are deductible, though only in the amount by which your total expenses for the year exceeds 7.5 percent of your AGI. Still, that’s nothing to sneeze at, even if you are the kind of superhero who doesn’t ever sneeze because you are invulnerable to germs.
3. Hero-mobile excise taxes
If you itemize your deductions, you may deduct the complete amount of motor vehicle excise taxes that you pay on your primary mode of heroic transportation—be it your Ka-POWmobile, your VengeanCycle, or your Superla-boat.
4. Mortgage interest
Different kinds of interest are treated differently. Personal interest, such as that paid on car loans or credit cards, is not deductible. But mortgage interest on loans up to $1.1 million typically is deductible—whether that mortgage is on your Ka-POWmobile home, your VengeanCondo, or your Superla-bode.
5. IRA contributions
An individual retirement arrangement is possibly the single most important element of your financial plan. Income from the interest, dividends, and capital gains will compound each year without being reduced by taxes. In addition, depending on your plan, you also avoid taxes on either the money you contribute initially or the money you withdraw after hanging up your costume. To put this into familiar terms: Imagine that you discovered, say, five thousand power crystals on an alien battleworld, and on your way back home the infamous Avuncular Samurai tried to get his notoriously greedy clutches on some of them before you could secrete them in an impenetrable vault at your HQ. An IRA is the cloaking device that will hide those power crystals from Avuncular Samurai’s sight.
6. Energy-efficient renovations
to your base of operations
You will not be able to take this deduction if you work out of a natural, cavernous, subterranean chamber… or if you commute to Earth from Mars, for example… but if your headquarters is instead an urban loft, a seemingly abandoned rural warehouse, or even an Arctic Stronghold of (Voluntary) Estrangement, then you can receive a $1,500 credit for qualifying improvements—added insulation, energy-efficient (but, presumably, still tinted and bulletproof) exterior windows, and HVAC upgrades.
Alimony is tax-deductible in the year when it is actually paid. That means that if you were too busy last year battling giant robot ants or miniature robot dinosaurs to make your alimony payments on time, but you caught up on back alimony this year, you can deduct it all now. (The alimony recipient’s Social Security number must be listed on your return in order for you to qualify for the adjustment, which means your nemesis could discover the identity of your ex-spouse. But that could be a good thing.)
8. Deductions for the self-employed
As a vigilante working for yourself, you are able to deduct one half of your self-employment taxes and your health insurance premiums from your adjusted gross income. Also, the costs of uniforms (e.g., Tuna-suit), communications devices (Tuna-phone), and computer equipment (Tun-a-tron) are deductible as legitimate business expenses for the self-employed.
9. Charitable contributions
This last one can be tricky. On one hand, everything you do as a superhero (thwarting the nefarious designs of megalomaniacal misanthropes, repelling extraterrestrial invasions, and rescuing cats from really tall trees) can—and probably should—be considered charitable. On the other hand, that is your job. So you will probably get a tax deduction only for actual monetary gifts made to qualified charities and certain private foundations. What you might want to do, therefore—though you did not read it here—is create your own private foundation (in the name of your civilian alter ego, of course) so that the money never actually leaves your hands, even when your gauntlets come off. (Because that’s where the money will do the most good, after all.)