The Craziest Tax Deductions Ever

  • Weird Tax Returns

    When it comes to taxes, some people will try anything to save a little extra. People try to deduct some weird items, from extra business mileage to Spanish language cable to call girl services. In many cases, these filers try to make the case that these deductions are for business. Photo Credit: blmurch
    Tax Filing for Dummies
  • Tax Filing for Dummies

    Unfortunately for these folks, the IRS isn’t stupid. Auditors aren’t afraid to call these “creative” souls on their perfidies. When the IRS decides that you took a deduction you didn’t deserve, you are required to pay what you owed — plus penalties and interest. While you consider whether or not you should take that deduction, peruse these crazy tax stories. Photo Credit: Getty Images
    My Dog Works for Me
  • My Dog Works for Me

    There are instances where business owners actually name their dogs as independent contractors, and then try to deduct what they "pay" their talented canines. Unfortunately, the IRS doesn’t recognize dogs as eligible employees and contractors. And, no, hiring your dog to "work security" doesn’t count either. Photo Credit: WikiMedia
    My Cat Had an Infestation
  • My Cat Had an Infestation

    One business owner decided to deduct a visit to the vet on his taxes. Knowing that there is no way a vet visit could count as a business deduction, he termed it an “exterminating expense.” Of course, without proper records the truth was quickly revealed. Photo Credit: WikiMedia
    My Time Monitor is Expensive
  • My Time Monitor is Expensive

    Many doctors have very technical names for very technical machines. However, one doctor tried to take a deduction for a “time monitoring system.” Of course, that was a technical name for a very common item — a watch! He wanted a deduction for his expensive Rolex. Photo Credit: WikiMedia
    My Tat is Part of My Costume
  • My Tat is Part of My Costume

    An independently contracted exotic dancer once asked if she could deduct the cost of her tattoo as a business expense, since it was visible as part of her, uh, act. Answer: No. A tattoo isn’t unique to the business. But the rest of her dancing costume is deductible. And one exotic dancer was allowed to deduct her breast implants. Photo Credit: WikiMedia
    I Have a Lot of Invisible Associates
  • I Have a Lot of Invisible Associates

    One businessman wanted to claim deductions for a great deal of “business” meals and entertainment. When asked for substantiation, though, he turned in a brand new ledger (published after the tax year), with the same color ink for all the entries. Busted! Photo Credit: WikiMedia
    I Donated My Wife’s Underwear
  • I Donated My Wife’s Underwear

    After his wife died of cancer, one man decided he could honor her memory by donating her undergarments to charity. He valued the items liberally, and counted them as charitable donations to thrift stores. As long as he’s got the receipts to back it up, it should work out just fine. Photo Credit: WikiMedia
    I Entertain All My Clients at Hooters
  • I Entertain All My Clients at Hooters

    One salesman ate most of his meals at Hooters. He couldn’t say who he was meeting, or the purpose of the meetings, but he was sure they were for business. Unfortunately for him, you really need to know who you were doing business with and why. Photo Credit: WikiMedia
    My Steer is Especially Talented
  • My Steer is Especially Talented

    Back in the day, it was possible to take an investment deduction on purchases of breeding stock. Buying cattle was one way to take advantage of this — as long as the right kind of cattle was bought. One woman tried to take a deduction for steers. Only problem: steers don’t have the ability to breed. Photo Credit: WikiMedia
    I’m Always in the Car
  • I’m Always in the Car

    When you’re in business, you can take a mileage deduction. However, one man tried to deduct an absurd amount of miles. In fact, if he had actually driven as much as he claimed for his deduction, he would only have slept six hours out of the entire year. Photo Credit: WikiMedia
    My Clients Enjoyed the Show
  • My Clients Enjoyed the Show

    Businessmen and lawyers are always trying to find ways to deduct expenses incurred by paying for sex. One businessman wanted to deduct the cost of a call girl he hired to entertain a group of clients. However, in order to claim her as a contractor, he would have to issue her a 1099 as documentation to support the business expense. Photo Credit: WikiMedia
    I Invited My Clients to the Wedding
  • I Invited My Clients to the Wedding

    After throwing a $50,000 wedding for his daughter, a man tried to deduct the large costs, claiming it was a party thrown for his clients. He justified it by insisting that he did, in fact, invite all of his clients to the wedding. Photo Credit: WikiMedia
    My Kid’s a Deadbeat
  • My Kid’s a Deadbeat

    Some parents want to count money they gave to their children as a bad debt loss. (Taxes on money gifts have to be paid by the giver.) However, this only works if you set up a loan on paper, and then tried to go through legal channels to collect on it. Photo Credit: WikiMedia
    My Assets Have Been Depleted
  • My Assets Have Been Depleted

    Many men make a little cash as sperm donors. They get paid for this, but then have to report the income to the IRS. One man tried to see if he could get an allowance for depletion, since he had lost some, er, assets. No go. Photo Credit: WikiMedia
    But He Helped Me with My Business
  • But He Helped Me with My Business

    After being unable to sell his furniture store, one man hired an arsonist. He did everything by the book, reporting the insurance payout on his taxes and even properly deducting the building’s loss. Unfortunately, he also deducted the $10,000 he paid to the arsonist as a “consulting fee.” An audit put both of them in prison. Photo Credit: WikiMedia
    But I’m Teaching Spanish!
  • But I’m Teaching Spanish!

    One Spanish teacher decided to deduct the cost of his Spanish language cable subscription as an expense related to being a better teacher. On top of that, he tried to deduct the TV as well, claiming that he only bought the new TV so that he could watch the Spanish language TV — all for the kids, of course. Photo Credit: WikiMedia
    I Can’t Wear My Teeth Anymore
  • I Can’t Wear My Teeth Anymore

    One man’s dentures fell out of his mouth and into the toilet. He lost them down the drain. He decided to try and claim them on his taxes as a casualty loss due to an act of God. Too bad for him that it doesn’t quite work like that. Photo Credit: WikiMedia
    Tip: Know What You're Doing
  • Tip: Know What You're Doing

    Deductions can be a real help in lowering your overall tax liability, but you need to be careful. Make sure that you really do qualify for deductions. If you are taking deductions for a home business, you need to be scrupulous about ensuring that the expenses you deduct are truly for your business only. Photo Credit: WikiMedia
    Record Everything!
  • Record Everything!

    When it comes to deductions, whether for miles traveled or charitable contributions, the key is to properly document everything. You need to keep good records. A running diary is a good idea; you should enter your expenses and mileage regularly, with notations of where you went and whom you met. You should also get receipts for charitable donations and business meals to back up your claims. Photo Credit: WikiMedia
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