Chasing Deductions and Flying Squirrels
Tax season is in full swing so in this edition of the Flying Point Update we're going to talk about the difference between tax optimization and actual wealth building, a Maine tax credit you might be missing, and flying squirrels.
Top of Mind
I have a confession: I follow finfluencers. Not for tax advice, but partly for entertainment and partly for professional reconnaissance. It's helpful to have advance notice of what questions might be coming my way.
If you're unfamiliar with the term, "finfluencer" is a portmanteau of "financial" and "influencer" - people who build social media followings around money advice. Some are genuinely knowledgeable. Others are... creative. The content ranges from legitimately useful tips to elaborate schemes that would make a tax attorney wince.
What I've noticed is that much of the advice centers on novel ways to make things deductible. How to deduct your Netflix subscription as a business expense. How to write off your vacation as market research. How to run your designer sunglasses through an HSA because they're technically prescription. There's often a kernel of technical merit buried in these ideas, which makes them appealing. The logic holds together if you squint hard enough and ignore a few inconvenient details.
But here's what almost always gets glossed over: spending a dollar to save thirty cents is not a wealth-building strategy...
Let's say you find a way to make those $800 designer prescription sunglasses a legitimate medical expense. Congratulations! You've saved maybe $250 in taxes depending on your bracket. You've also spent just $800 on sunglasses. You are now $550 poorer than if you'd just... not bought $800 sunglasses. The tax tail is wagging the spending dog.
I see this a lot. People convinced they need to buy a vehicle for the Section 179 deduction. Business owners making unnecessary purchases in December because "it's deductible." The logic feels compelling in the moment, but the math doesn't lie: a deduction reduces your taxable income, it doesn't eliminate the cost. Unless you were already going to make the purchase, the "tax savings" is just a discount on spending you didn't need to do.
The healthiest relationship with taxes is pretty boring: don't pay more than you legally owe, take advantage of legitimate deductions and credits for things you're already doing, and make financial decisions based on whether they make sense before considering the tax implications. If something only makes sense because of the tax benefit, it probably doesn't actually make sense.
None of this is to say tax planning doesn't matter - it absolutely does. But the goal should be optimizing around decisions you've already made for good reasons, not contorting your life to manufacture deductions. Save the creativity for your hobbies.
Worth Knowing
In the spirit of legitimate tax benefits that don't require elaborate justifications or unnecessary spending, let's talk about one Maine taxpayers frequently overlook: the Student Loan Repayment Tax Credit.
If you're a Maine resident making payments on qualified educational loans, you may be eligible for a state tax credit of up to $2,500 per year. This is an actual dollar-for-dollar credit against your Maine income tax, not just a deduction. Even better, it's fully refundable - if the credit exceeds your Maine tax liability, you get the difference back as a refund. The lifetime cap is $25,000.
Here's a quick self-assessment to see if you might qualify:
You need to have earned an associate, bachelor's, or graduate degree after 2007 from any accredited college or university (it doesn't have to be in Maine). You must be a Maine resident, file a Maine tax return, and have earned income of at least $13,712 in 2025 (this threshold is based on minimum wage and adjusts annually).
The loans must be in your name and must have been used to pay for your education at an accredited institution - this includes both federal student loans and private educational loans. Refinanced or consolidated loans can still qualify, but only if they remain separate from other non-educational debt. If you rolled your student loans into a larger debt consolidation that included credit cards or other borrowing, those payments won't qualify.
Loans from family members don't count either. Refinanced or consolidated loans can qualify, but only if they remain separate from other non-educational debt. Parent PLUS loans don't qualify since the loans need to be in the student's name. Payments made by someone else on your behalf don't count - you need to be making the payments yourself directly to the lender.
If you're claiming this credit for the first time, Maine Revenue Services requires documentation with your return: a copy of your college transcript showing your degree and graduation date, proof of the educational loans that qualify for the credit, and documentation showing the actual loan payments you made directly to the lender during the tax year. There's a worksheet (the Student Loan Repayment Tax Credit Worksheet) that gets filed with your Form 1040ME.
If both spouses on a joint return have qualifying loans, each can claim the credit separately - just complete a separate worksheet for each person.
This is exactly the kind of benefit that's easy to miss and doesn't require any creativity to claim - just awareness that it exists. No elaborate schemes, no aggressive tax positions, no spending money you wouldn't otherwise spend. Just a credit for something you're already doing.
Mark Your Calendar
March 15th: S-corp and partnership tax returns are due (or extensions must be filed). This is also the deadline to file Form 2553 if you want to elect S-corp status for 2026.
April 15th: Tax filing deadline for individual returns. Also the deadline for IRA contributions for 2025 and Q1 2026 estimated tax payments.
We're in the thick of tax season now. If you haven't started gathering your documents, now's the time.
Maine Wildlife Facts
The other night, I walked into our barn to take out the trash and found a flying squirrel sitting in the trash can, looking up at me with an expression I can only describe as embarrassed confusion. How it got there remains a mystery. Will and Frank came running out to see, and together we carefully tipped the can on its side and watched it scurry off into the darkness.
Despite their name, flying squirrels don't actually fly - they glide, using a membrane called a patagium that stretches between their front and back legs. They can glide up to 150 feet between trees, steering with their flat tail and landing with surprising precision.
What surprised the boys most is how common flying squirrels are in Maine, but because they're strictly nocturnal, most people never see them. They have enormous eyes adapted for night vision, giving them that distinctly wide-eyed, startled appearance - which was certainly appropriate for our trash can visitor.
Unlike many small mammals, flying squirrels don't hibernate. They stay active throughout Maine winters, though they become more communal in cold weather, huddling together in tree cavities or attics for warmth. Groups of 10-20 flying squirrels have been found sharing a single nest in winter. They also cache food like their red squirrel cousins, storing nuts and seeds in tree hollows and other hiding spots.
Will has declared that we need to set up a trail camera in the barn to catch more flying squirrel activity. Frank is convinced we should leave snacks in the trash can "to make them happy." I've vetoed the snack idea but the trail camera might actually happen.
Frank turns 4 before the next newsletter and has been promised he can pick whatever animal he wants for his birthday issue. Stay tuned.
These Maine wildlife facts have been brought to you by Will (7) and Frank (soon to be 4), Flying Point Advisors' on-staff naturalists.
Questions about any of this? Just reach out - I read every email and love hearing from you. Thanks for reading. You'll hear from me again in about two weeks.
-Mike
Disclaimer
The Flying Point Update is provided for general educational and informational purposes only. The content in this newsletter reflects my thoughts and observations on tax, accounting, and financial planning topics, but should not be considered personalized tax, accounting, or investment advice for your specific situation.
Tax laws are complex and change frequently. The information presented here is based on current tax law as of the publication date and represents general concepts that may not apply to your circumstances. Every individual and business has unique factors that affect their optimal tax and financial planning strategies.
Before making any financial decisions or implementing any tax strategies discussed in this newsletter, please consult with a qualified tax professional, CPA, or financial advisor who can evaluate your specific situation. If you'd like to discuss how any of these topics might apply to your circumstances, I'm always happy to chat.