It’s nearly income tax time again, and many taxpayers will be heading down to the wire to make their expenses balance out this year. Some people are good at simply figuring out their standard deductions, while others develop extreme creativity they never knew they had. Over the years people have tried nearly anything to make their numbers work.
Like the parents who bought their son clarinet lessons. According to www.elementaryfinance.com, the family wrote this off as a medical expense, because playing the instrument was correcting the child’s overbite. The IRS agreed with them.
In other family news, if you happen to use a babysitter on the day that you volunteer for charity work, you can deduct the cost of the babysitter.
Other family expenses, those from animals, are usually denied by the IRS. But a junkyard owner began setting out bowls of cat food to attract wild cats, who would then keep snakes and rats out of the business’ scrap yard. The IRS permitted the junkyard to take a $300 business deduction for cat food.
Another case of animals in business came from an ostrich farmer wanted to depreciate his ostrich. The IRS says this is acceptable, as long as the animal is used for breeding.
Meanwhile, www.bankrate.com brings us a story from the Amish community. A man who was legitimately Amish wanted to deduct his buggy on his return. The only problem the IRS had with this was the buggy’s tinted windshield, speedometer, hydraulic brakes, dimmer switches, dash lights and velvet interior. About $900 more to pimp his buggy, so to speak.
The buggy, which the man uses for business was deductible. Most of the extras were not.
Business expenses, of course, cover a lot of areas. A professional bodybuilder liked to cover his body with “ProTan Muscle Juice Professional Posing Oil” before his contests, and he was allowed to deduct it for his job. But the IRS denied the man’s attempts at deducting protein drinks and specialty foods.
Some businesses don’t turn out all that well, and they required added expenses. Www.wisebread.com tells the tale of a man who came up with a truly original idea to save his failing furniture business. He decided to hire an arsonist. His shrewd business plan was to collect $500,000 insurance for his building, and then deduct the $10,000 he paid the arsonist as a business expense. Strangely, he was denied.
A smarter idea came from a man who was diagnosed with emphysema by his doctor and told that he needed to exercise. So for his necessary medical expense the man put in a swimming pool. The pool, chemicals, heating, cleaning, and upkeep were all permissible deductions.
And the smarter businesses will hold their conventions in Bermuda, because they can be deducted without even having a special reason to hold the meetings there. Us possessions such as the Dominican Republic, Jamaica, Costa Rica, Trinidad and Mexico all fall into the same category.
Sometimes increasing profitability in a business requires extraordinary measures. As in the case of Cynthia Hess (aka:”Chesty Love”), an exotic dancer who was allowed a $2,088 tax deduction by the IRS for her breast augmentation surgery which left her with a size 56 FF chest.
The treatment was allowed because Cynthia’s “deductions” were considered stage props essential to her act.
It’s also essential that families make ends meet during hard financial times. The IRS prefers honesty and integrity to some of the above stories. They have numerous publications available for people to learn all of their rights as taxpayers, and about all of the new rules taking effect this year that might give taxpayers an advantage.
Just remember, a little too much creativity might earn someone “the right to remain silent.”