Seven Unusual Tax Deductions
We have all heard cases of strange failed tax deductions, such as writing off a personal racehorse as a business entertainment expense, a toothless actor being unable to write off his dentures, and our personal favorite – a business owner who had his store burned by an arsonist, claimed the insurance as income, and tried to deduct the arsonist's $10,000 fee as a business expense. Some people just don't know when to stop.
However, there are more than a few odd tax write-offs that do manage to pass IRS scrutiny, or are later approved by the Tax Court. They probably will not apply in your case, but who knows....
1. Addiction Treatment – Certain types of addiction treatments may be written off under Medical and Dental expenses. Examples include smoking cessation programs (but not nicotine gum or patches), weight loss expenses that are related to specifically diagnosed diseases such as obesity and high blood pressure, and inpatient treatment for alcohol and drug addiction.
For the majority of taxpayers, addiction treatment expenses (along with other medical and dental expenses) may be deducted beyond the threshold value of 10% of your adjusted gross income (AGI).
2. Breast Implants – While cosmetic procedures are not normally deductible, an exotic dancer successfully argued that her breast implants were a necessary part of her business, and that without the implants, she would lose income to other exotic dancers. Insert your own joke here.
3. Breast Pumps – Is anyone sensing a theme? Breast pumps as well as other devices to increase lactation for new mothers are deductible as necessary medical devices.
4. Clarinet Lessons – Clarinet lessons in general are not deductible, but if they are part of an orthodontist's regimen to help deal with an overbite, they may be deductible as a medical expense. The way a clarinet is positioned in the mouth decreases the pain of an overbite. Both the cost of the clarinet and the lessons may be deducted.
5. Guard Animals – If you use a guard dog or other animal to protect your property, you may be able to deduct some of the costs of caring for that guard animal. The Tax Court even allowed cat food to be deducted for a cat that was deemed necessary to a junkyard to keep it free of rats and snakes. Presumably, you would have a difficult time deducting a guard opossum or halibut.
6. Pet Moving Expenses – Moving expenses associated with job relocation include the expenses of relocating your pet, and all of those expenses are deductible above-the-line – meaning they reduce your adjusted gross income (AGI) and can be taken whether or not you itemize.
These expenses may not be much if your move is a relatively short drive but shipping your dog or cat across the country is relatively expensive – not to mention transporting your horse.
7. Lawn Care and Landscaping – You may be able to deduct lawn care and landscaping expenses if they are an integral part of your home business. You must be a sole proprietor who regularly meets with clients in the home office, and you must show why the landscaping is relevant – perhaps your business caters to upper-income clients that would be reluctant to do business with you, or your home business involves gardening or landscaping.
These cases all illustrate one fact – if you can make a reasonable argument, the IRS will at least consider unusual tax deductions. Prepare your argument carefully and use common sense to the extent possible. We strongly discourage anything that involves arson!