Could these 12 weird tax deductions save you money?

What Is Washington Saying About Tax Inversions?

This year, thanks to a little extension from the federal government, we all get until April 18 to file our taxes. That gives us three full days more to ponder the deductions we deserve – or are at least allowed – to boost those refunds or cut our tax bills.

Did you put in a pool? Captain a whaling ship? Go on a safari? To get you thinking, here are 12 of the oddest allowed deductions according to the IRS, the U.S. Tax Court and other sources. Most apply only if you itemize deductions, and some must meet thresholds, such as miscellaneous business expenses that only count when they exceed 2 percent of your adjusted gross income. To see which ones you can take, read on. (And, if in doubt, be sure to contact a tax professional.)

1. Cruising, as a business expense

Collection:    Brand X Pictures (RF)Item number:    78393272Title:    Ships, New Providence, BahamasLicense type:    Roya

Aruba, Jamaica, ooh, I want to take you and write off the trip — or at least part of it. Your luxury cruise to a business convention in, say, balmy Bermuda, qualifies as a business expense within limits that vary by the time of year, the IRS says. In one example, the agency illustrates how a $5,200 trip could result in a deduction of $3,650. If the convention is on the ship, you can only deduct up to $2,000.

2. Whale of a break

USA, Alaska, Tongass National Forest, Humpback Whale (Megaptera novaengliae) breaching in Frederick Sound

When was the last time you went whaling? (And we don't mean just watching the magnificent sea creatures.) Acquiring and maintaining whaling boats, weapons, gear and food for your crew used in sanctioned whaling activities may be deductible up to $10,000 a year, the IRS says. The catch, so to speak: To claim the deduction, you must be recognized by the Alaska Eskimo Whaling Commission as a whaling captain.

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3. Historic preservation can also conserve on taxes

Historic Colonial Paine House in Coventry, Rhode Island

Do you own an old house or other building in a historic district? Your agreement with, say, a city or preservation group to leave its look alone could qualify for a tax deduction as charitable donation, but don't overstate your case. Many considerations determine the value of a conservation easement, says the U.S. Tax Court. In one case, the owners of a $5.2 million home in New York City's Carnegie Hill Historic District in Manhattan deeded away their rights to change its façade. On their tax returns, they valued their donation at $605,000. Oops! While the court decided they could take a deduction, it also decided the donation was worth only $104,000, or 2 percent of the home's value. The homeowners had to pay not only more taxes but also a penalty of 40 percent of the additional tax.

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4. Sprucing up your appearance

Woman gardening

Your lawn care expenses might be deductible if you work from home and the state of your lawn matters to clients who meet you in your home office. A business owner may feel the need to keep up appearances, especially if the business is, say, a landscaping company.

5. Pools — and more — as medical expenses

Boy at the swimming pool

It may sound far-fetched to claim a new swimming pool as a necessary medical expense, but it may be deductible, along with chemicals, heating, cleaning and other spending on general upkeep. The IRS puts it this way: "The cost of permanent improvements that increase the value of your property may be partly included as a medical expense." Among the other improvements that may qualify as deductions include widening hallways, upgrading smoke alarms, adding handrails and more.

6. Fostering furry friends

Striped with white a cat.

Volunteers cuddling cats or pampering pooches under foster care in their homes on behalf of legitimate, nonprofit animal charities – look for the 501(c)3 designation — may deduct unreimbursed expenses directly related to animal care. Some restrictions apply and you must be ready to substantiate your claim, but, as the tax court ruled for Jan Elizabeth Van Dusen of Oakland, California, pet food, medicines, veterinary bills and crates could all be deductible.

7. Cat patrol deduction

Chat qui chasse

In another cat food fight, the IRS conceded in tax court that Samuel and Carol Seawright incurred a legitimate business expense coming up with a creative way to solve the problem of snakes and rats infesting their Columbia, South Carolina, junkyard. The couple spent $300 on cat food left out to attract wild cats that ran off the vermin. It was a small victory in a larger, lost battle that left the Seawrights owing thousands over how they determined other expenses.

8. Grab this sports donation deduction

Group of children soccer players embracing standing in front of coach, back view

If you're into college sports and you pay a school for the right to buy tickets to athletic events in its stadium, you could score a deduction of 80 percent of the payment, says the IRS, as long as it's not the ticket to the game. In an IRS example, you pay $300 a year for membership in a university's athletic scholarship program. Your only benefit is that you have the right to buy one season ticket for home games. You can deduct $240 (80 percent of $300) as a charitable contribution. However, if your $300 payment includes a season ticket for, say, $120, subtract the ticket price from your $300 payment; you may deduct $144, or 80 percent of the remaining $180 value of your rights payment.

9. Hosting a foreign student

Catching the Tram in the City

If you put up a foreign exchange student in 12th grade or below, you may be able to deduct up to $50 in nonreimbursed expenses for each month he or she stays in your home, the IRS says. You'll need a written agreement with a nonprofit or government group making the arrangement, and the student can't be your relative or dependent. Otherwise, what you shell out for books, tuition, food, clothing, transportation, medical and dental care, entertainment and items for the student's well-being counts toward the $50-a-month limit. The deal is off, though, if your child will live with a family in a foreign country as part of a mutual exchange.

10. Pets on the move

USA, Florida, Jupiter, Young woman with dog in their new house

If you meet the IRS rules for deducting moving expenses because you're taking a new job, don't forget to include the cost of shipping Fido and Fifi to your new home. The IRS says you may deduct the cost of packing, crating and transporting your household goods and personal effects – and your pets, too. If your new employer is reimbursing you for the move, these won't apply.

11. Gambling ups — and downs — count

Gambling chips stacked around roulette wheel on gaming table

You want to bet that your lost wagers are deductible? What happens in Las Vegas doesn't necessarily stay in Las Vegas when you win big at the tables or slots. Gambling income counts when it's from lotteries, raffles or horse races, too. Fortunately for most gamblers, the IRS also recognizes losses — allowing them to be deducted up to the amount of an individual's winnings. But it's tricky. Winnings go on "other income" on line 21 of Form 1040; enter losses on "Other Miscellaneous Deduction" (line 28) Schedule A. Keep good records, says the IRS.

12. Safari write-off ... perhaps?


Way back in 1950, O. Carlyle Brock, president of the Sanitary Farms Dairy in Erie, Pennsylvania, and his wife, Emily, took a six-month hunting trip to Africa and, after a U.S. Tax Court fight, were allowed to write off the safari as part of the dairy's advertising expenses.

But the case illustrates that you need to make a business argument for your exotic travels. The dairy had an ongoing wild animal campaign, often inviting customers to dine on game and watch hunting films. The Brocks filmed their adventure. Photos they took were used in advertising and local newspaper articles while they were gone. Upon their return, the animals they killed were displayed in museums, and the dairy even gave two live leopards and a tiger that the Brocks brought back to the Erie zoo and conducted a "Name-the-Tiger" contest.

"There is a little bit of the hunter in all of us, a little of the adventurer," said the Tax Court judge, quoting an advertising agent.

Related: 10 strangest ways tax you (or don't)
10 Strangest Ways That States Tax You (or Don't)
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Could these 12 weird tax deductions save you money?
To preserve the uniqueness of their island paradise, Hawaii since 2004 has had an "Exceptional Tree" tax allowance. Landowners can deduct up to $3,000 from their income for expenses such as pruning and fertilization for any tree designated as rare, big, old or a combination thereof. That's per tree. Top-bracket earners taxed at the state's highest rate (11 percent) would save $330 via the deduction. The work must be done by a certified arborist, and the deduction can be claimed only every third year. Hawaii has had a list of "Exceptional Trees" since 1975, and there are now estimated to be more than a thousand thus designated.
Maine legislators tax anyone who deals in their official state fruit-blueberries, at the rate of 1.5 cents per pound. The resulting revenues-more than $1.6 million to state coffers in the fiscal year that ended in June 2013-are used to promote the crop and agricultural research. 
The state also taxes harvesters and processors of hard-shell clams (known in the state as mahogany quahogs) at $1.25 a bushel, but state revenues for that are much lower. 
Alabama is the last in the union to tax a deck of cards as if it were a "vice," like alcohol and tobacco. Taxing decks of cards, associated with gambling, was once fairly common, but most states have since set up separate control boards to regulate liquor and tobacco, and have let the cards slide.
But in Alabama, you'll still pay a 10 cent sales tax on any pack of cards you purchase. Retailers also have to pay $2 to the state each year for the privilege of selling playing cards.
Virginia levies a 50-cent excise tax on every lamb or sheep sold in the state. Both the Maine and Virginia taxes are examples of checkoff programs that collect taxes from an industry to fund promotional campaigns for the products. National commodity checkoff programs, authorized by the U.S. Department of Agriculture, have brought you campaigns such as "Beef: It's What's for Dinner" and "Got Milk?" But the Virginia program is extremely modest by comparison, having collected only $9,000 in fiscal year 2013. The funds go to the Virginia Sheep Industry Board, which spends them largely on predator control.
In 2013, in part to meet federal pollution-control mandates, Maryland legislators enacted fees on property owners in Baltimore and nine other Maryland counties, aimed at curbing storm water runoff. The fees were meant to fund programs to improve the water quality of the Chesapeake Bay, the largest marine estuary in the U.S. Sounds simple enough, but the way Maryland legislators wrote the law has led to an angry backlash in some corners against this so-called “rain tax.” One way localities calculate the tax is by measuring how much of a landowner’s tract is "impervious" to precipitation seeping into the ground. So the more you've developed it with buildings, driveways, tennis courts and the like, the less it will absorb and the more you pay. That's how the tax is being implemented (through aerial and satellite photos) in Montgomery County, a heavily developed suburb of Washington, and many landowners are up in arms. New Maryland Gov. Larry Hogan, a Republican, campaigned against this tax in his winning 2014 campaign and has introduced legislation to repeal it, though it’s not clear that will fly with Democratic state legislators. Money still needs to be raised to satisfy the federal pollution mandates, but the methods may change.
Kansas is among a bevy of jurisdictions that allows sale of lower-alcohol beer (the term of art is “cereal malt beverage”) in convenience and grocery stores. But Kansas also taxes “3.2” beer differently -- and there lies the rub. At a liquor store, all products, including, say, a conventional six-pack of Budweiser (with 5 percent alcohol by volume), are taxed at a special rate of 8 percent. At the convenience store down the street, however, ordinary sales tax is levied on the lower-alcohol, cereal malt beverage bottle of Bud. That often ends up being more than the 8 percent alcohol tax. In Pomona, Kansas, for example, the effective rate on the weaker beer would be 9.7 percent. Go figure.
When it comes to taxation, the rule is generally the stronger the booze, the higher the tax (that's why Kansas's beer tax scheme is an anomaly). California follows that curve, but at 100 proof, you better be ready to pay through the nose. Distilled spirits are taxed at $3.30 a gallon if below 100 proof, or 50 percent alcohol. Go over that, like with Bacardi 151, and the tax doubles to $6.60. Maryland also notes the 100 proof point, but it only adds 1.5 cents per proof, per gallon to the relatively modest liquor tax of $1.50 per gallon, taking the Bacardi 151 to $2.27 per gallon.
Entertainment venues pay a business tax to Nevada ranging from 5 percent to 10 percent on admissions fees (and food, drink and merchandise sales) whenever there’s live entertainment going on. There are exemptions, however, including this one, for businesses that provide "instrumental or vocal music, which may or may not be supplemented with commentary by the musicians, in a restaurant, lounge or similar area if such music does not routinely rise to the volume that interferes with casual conversation and if such music would not generally cause patrons to watch as well as listen." So your piano player can play “Feelings” softly and even crack a few jokes, tax-free, for your business. Just make sure they're not funny enough to attract attention.
Want to own a plush or fuel-thirsty ride? That’ll cost you extra in New Jersey. Cars that cost $45,000 or more or have a combined EPA fuel-mileage average of 19 or below pay an additional 0.4 percent on top of New Jersey’s 7 percent sales tax. 
In New Mexico, making it to 100 years has a payoff beyond the chance that Willard Scott will wish you a happy birthday: You don’t have to pay state income tax anymore. If you’ve been physically present in the state for at least six months and a resident of the state on the last day of the year, and you’re not someone’s dependent, you’re eligible. You’ll still need to file, and there are some complications if you’re married and your spouse doesn’t qualify.

Where will your quest for a deduction take you? Or maybe you'll be better off just taking a standard deduction. Share with us in comments below or on our Facebook page.

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