Interesting Tax Deductions

Your Guide to State, Local, Federal, Estate + International Taxation

The IRS gives guidelines on what is deductible for individuals to take on Schedule A of their individual income tax returns, as well as business expenses or casualty losses. People tend to make their own interpretations of the IRS guidelines on tax deductions and the IRS does not always allow what people try to claim. I have recently come across a few articles that list some deductions people have claimed on their tax returns. Some were allowed by the IRS while others were not. Below are a few I find interesting, strange, or funny.

These deductions were disallowed:

  • A taxpayer tried to deduct the cost of removing carpet as a medical expense due to the fact that the taxpayer was allergic. The cost of installing wood flooring was also claimed as a deduction.
  • A taxpayer that had dry skin tried to deduct the cost of bath oils as a medical expense.
  • A taxpayer claimed a theft loss deduction for stolen photographs, souvenirs, and other “memories” that were allegedly stolen by her landlord and thrown away.
  • A family pet broke some dishes which the taxpayer tried to claim as a casualty loss.
  • A taxpayer claimed a mink coat as a business deduction because his wife wore it to business functions.
  • An owner of a failing furniture store tried to deduct $10,000 that he paid to an arsonist as a “consulting fee” to burn down the store. However, he did report the insurance proceeds as income.

These deductions were allowed:

  • A taxpayer claimed a medical deduction for a clarinet and clarinet lessons for their child to help correct the child’s overbite.
  • An exotic dancer claimed the cost of her breast augmentation. The IRS claimed it was nondeductible but the tax court allowed the claim and stated the implants were depreciable assets as a type of stage prop.
  • Posing oil was deducted as a business expense by a professional bodybuilder.
  • Cat food was claimed as a business expense and allowed because it was used to attract wild cats which would deter snakes from a scrap yard.

Based on these taxpayers’ experiences, it may be wise to check the deductibility of something before claiming it on your tax return.

By Kelsey Olsen