(Photo: Mike Baird/Flickr/CC-BY)

According to Fox News, first lady Michelle Obama is under fire for taking a private, luxurious trip to Spain with daughter Sasha and several Obama family friends. Of course, the so-called private vacation has quickly turned into a public affair, as the media is already criticizing her every movement. Now everyone wants in on everything the first lady’s private vacation entails.

Travel warning issued for Spain, where first lady vacations

While her husband celebrated his 49th birthday in Chicago with talk show mega-star Oprah Winfrey, Michelle Obama, with 9-year-old daughter and friends of the family, went on what the White House described as a four-day “private trip” to the beautiful southern coast of Spain. While some are avoiding talking about the trip’s price, others are voicing concerns of safety.

Fox News reports that the State Department had advised Americans traveling to Spain to take caution as “racist prejudices could lead to the arrest of Afro-Americans who travel to Spain,” a message posted on its website. The wording, however, can no longer be found, as it appears it was quickly pulled when the first lady and daughter Sasha left on their trip. State Department spokesman P.J. Crowley, when asked if there was a travel warning for Spain, said, “I don’t believe so.”

The costs of the first lady’s vacation trip to Spain

The biggest worry concerning the first lady’s vacation trip to Spain is the overall cost of the trip and the affect it has on taxpayer money. On Thursday, New York Daily News writer Andrea Tantaros trash-talked Michelle Obama, calling her a “modern day Marie Antoinette” for taking such a lavish vacation while most of the U.S. is financially struggling. According to the Yahoo News, the first lady and companions are staying at the luxury Hotel Villa Padierna, often described as one of the world’s top 10 hotels, with rates that range from $500 to $2,500 a night.

Whether it was the Obama delegation or Secret Service that chose the location, White House Press Secretary Robert Gibbs has stated that the first lady will pay for her own personal expenses, as will the private entourage traveling with her. The overall cost of the trip, however, will not be fully covered with personal out-of-the-pocket money, given that the first lady has full-time Secret Service protection and has to travel on board an official Air Force charter plane, which is covered by taxpayers.

Tax laws are getting more and more complex. Even with online filing available, there is still a myriad of ways consumers can get tripped up. Although some people choose to have their returns prepared by tax professionals, many more do the job themselves. For those who want to avoid tax debt, there are some basic rules to follow.

Report all income

One of the biggest mistakes people make (and the easiest one to avoid) is failing to report all income. This is by far the most common reason taxpayers get audited. There are some people who believe that if pay doesn’t come with a 1099 form, it isn’t worth reporting. Though this is a nice fantasy, the IRS has a different set of operating rules. Income is income and regardless of how small it is, it needs to be reported. The long arm of the IRS seems to be able to find out where money is going and who received it. To protect themselves, taxpayers need to be aware that all income must be reported. The usual penalty for failure to do so is 6% per year but it can be as much as 20% in some cases.

Keep business records straight

A frequent problem area for taxpayers is business expenses. Too many people report false or padded expenses on their tax returns and hope the IRS buys it. This is always a bad idea. First of all, business expenses need to be logical. For example, a small online web-development company probably won’t be able to justify buying an office cappuccino machine. Next, reasonable business expenses must be supported by proper documentation. Receipts are crucial for any item reported as a business expense. The IRS will want proof of when, where, and how much the item costs.

Get receipts for charitable contributions

For consumers who want to list charitable contributions on a tax return, receipts are critical. The IRS is never satisfied with a number on a tax return, without supporting documentation. It wants to see receipts. If a contribution is over $200, the taxpayer needs to have a letter from the charity that substantiates it. Also, contributions in exchange for dinner or merchandise can only be deducted to the extent that the contribution exceeds the fair market value of goods or services received in exchange.

Keep a travel mileage log

Another problematic expense on tax returns is mileage. Many times, salespeople and other employees are entitled to deduct miles traveled for work. The IRS allows the deduction, but only with the proper records to support it. I you are entitled to deduct mileage, you must keep an accurate travel log. It must include dates, miles, reason for the trip, names of persons contacted, and any other costs involved. For example, a salesman who travels 100 miles to take a high-profile client to dinner needs to keep receipts for gas, dinner, and any tolls paid along the way. The IRS will want to see all the receipts to verify deduction of expense.

The vast majority of American taxpayers are honest when it comes to filing and paying their taxes. The million dollar tax cheats are very rare. Instead of taking advantage of the system, it is actually the opposite that is true; most Americans do not take advantage of legitimate deductions and overpay on their taxes. The IRS reports that taxpayers tend to make the same mistakes each year. The number one mistake on returns every year is forgetting to include a social security number on the return. Luckily, this will only cost the taxpayer time and not money.

Convenience can be costly

Approximately 85 million taxpayers choose to take standard deductions as opposed to itemizing their tax returns. Only 46 million people itemize their returns. The smaller group of taxpayers actually claims twice the amount of deductions as the larger group. Itemized returns account for one trillion dollars worth of deductions while standard deductions only account for a half trillion dollars in deductions. Only legitimate deductions are included in these numbers from the IRS, so the itemizers are not cheating. Sadly, most people admit they file the standard form out of convenience and a lack of documentation. This convenience and lack of proper record keeping could be costing some taxpayers to pay four times their rightful tax obligation.

State sales tax most overlooked

Everyone is entitled to claim state sales tax they paid during the course of a tax year. The IRS provides tables showing how much can be deducted for each state based on income. The biggest advantage is for those people living in states that do not have a state income tax, but everyone can benefit from this deduction. In addition, there are items that can give a tax payer a bigger deduction than what the tables show. For example, if a boat, car, or airplane was purchased, that sales tax can be added to the amount shown in the table. State sales tax paid on home building supplies are also added to the table.

Giving could get you a deduction

Most tax payers already take the appropriate deductions for contributing to charitable organizations in the form of money. Taxpayers deduct money they contributed to religious groups, homeless shelters, etc. However, most taxpayers overlook the out-of-pocket deductions available for doing good works. For example, if you bake a cake for a church fundraiser, the cost of the ingredients is tax deductible. In addition, the taxpayer can claim 14 cents per mile for delivering the item.

Children benefit from Mom and Dad’s help

Interest paid is a common deduction. Most people know to deduct interest paid on mortgages and student loans. College students and graduates not claimed as a dependent can benefit from Mom and Dad’s help. The IRS treats the interest paid on a student loan by a parent as money given to the student first, who then paid the debt. As long as the child is not claimed as a dependent by the parent, the child can claim the interest as a deduction on his/her tax return.