In Your Interest: Crazy Tax Deductions

Have you filed your tax return yet? Hopefully you have, or at least filed an extension. Maybe you are still looking for things that you can deduct. If so, you might want to consider what others have tried to deduct in the past. CNN Money recently published a list of “crazy” tax deductions. Here are a few of the things that have been listed as a deduction on actual tax returns:

A salesman tried to deduct his toupee because he said it gave him more confidence and allowed him to do a better job at work. Unfortunately, it wasn’t allowed. Neither was a deduction for travel expenses for one woman’s pet, since she didn’t like to travel without her beloved dog. Another woman tried to claim her parents as dependents on her tax return, even though they were long deceased. When her tax preparer questioned the exemptions, she showed him the tax return instructions and proceeded to go through the tests to determine if someone was a dependent – they had no income, were related to her, did not file a tax return, and weren’t claimed as dependents by anyone else. Although this was rather clever, her deduction was denied.

Still another lady tried to deduct the $2,500 she spent on her grandmother’s 80th birthday party. She claimed that since she handed out samples from her coffee company, the party should be considered a business meeting and allowable as a business deduction. The tax preparer didn’t buy it. The owners of two competing businesses decided to get married and merge their two businesses into one. So they tried to deduct the cost of the wedding as part of the merger expense. The tax preparer said that while the wedding did in fact prompt the merger, it occurred before the businesses merged and was therefore not part of the actual process. One woman was allowed to deduct her iphone, however, as a medical expense. After getting into a terrible accident and suffering major brain injuries, the phone now operates as her assistant – reminding her of things she needs to do and answering her questions via Siri. Her doctor said she absolutely could not function without it. A police officer was allowed to deduct “snitch fees” – money he spent on informants while trying to catch criminals, since that was his job.

Although these actual cases are funny, they remind us how important it is to do all things with integrity. Remember that even if you think no one may ever know, God does.

— Contact Valerie Rumbough at 800-723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.