Everyone is gearing up for tax season: collecting all their receipts and scrambling to come up with every single applicable tax deduction in an attempt to reduce taxes owed.
I thought it would be fun to look at some of the not-so-common tax deductions stories. First, let’s look at some legitimate, but weird tax deductions:
Swimming Pool: A swimming pool, prescribed for medical purposes, was once deducted as a medical expenses.
Pet Food: The expense of food used to feed a cat was once deducted as a business expense. The justification was that the cat protected the business from rats, and vermin.
Body Oil: One tax court ruled that body oil, used to highlight bodybuilder muscles during competitions, is considered a legitimate business expense.
Babysitting Fees: If you use a babysitter on the day that you volunteer for charity work, you can deduct the cost of the babysitter, according to one tax court ruling. Take a look at a few common charitable deductions you can take advantage of in 2010 to boost next year’s refund.
Free Beer: The cost of beer, given to customers as a business promotion, was once deducted as a legitimate business expense.
Some tax filers try to deduct some very strange things on their tax returns. Here are a few odd tax deductions that didn’t pass muster with the IRS:
Mink Coat: A business owner, who often brought his wife along for dinner while entertaining clients, tried to deduct the cost of his wife’s mink coat. He claimed the coat was a conversation piece and a part of the entertainment.
Racehorse: Another business owner once purchased his own racehorse and tried to claim it as a business expense. His justification was that he brought his business clients to the horse races to be entertained by watching his horse race.
Therapeutic Sex: In one of the weirdest stories, a lawyer in New York was alleged to have tried to claim $100k worth of expenses for prostitutes and pornography as “medical expenses.” These expenses were apparently helping to improve his osteoarthritis and other functions.
Even more obscure tax deductions can be found on a state-by-state level. Check out these state-specific gems:
Did you know July is deemed National Blueberry Month? In the state of Maine anyone who grows, purchases, or sells blueberries is privy to a $0.015 per pound tax. You can check out the blueberry form (properly titled “Blu”) if you crave more antioxidant goodness.
Have you ever heard of an amusement tax? Well if you live in certain states or cities, you may be privy to one. According to their city website, in Pittsburg, PA, “an amusement tax of 5% is levied on the gross admissions of patrons of any type of event that offers entertainment or allows the patrons to engage in the entertainment.”
Crave more weird tax deduction goodness? Visit my PT Money blog to see 5 More Crazy Tax Deduction Stories.