Tax deductions are frequently a helpful tool for lowering your tax liability, but some of the IRS-permitted deductions may leave you speechless. These strange deductions are real and have garnered attention over the years, despite their odd appearance. This article explores eight odd but legitimate tax deductions that some taxpayers have been able to claim; however, before attempting to use them yourself, make sure to speak with a tax expert!
Unusual Yet Lawful: 8 Amazing Tax Deductions You Were Unaware You Could Take
A swimming pool? It might qualify as a medical deduction
Although it might seem like a luxury, the IRS occasionally permits you to claim a medical deduction for a portion of the costs associated with installing a swimming pool. Your doctor must recommend swimming as part of your treatment for you to be eligible. Furthermore, the only expenses that are deductible are those related to medical modifications (like lifts or ramps). Although this may seem excessive, the IRS will carefully examine whether the pool is utilized for legitimate medical needs, making this a unique combination of luxury and need.
Are Payments for Ransomware Tax Deductible?
Companies that have experienced ransomware attacks might be able to deduct the cost of paying the ransom. The IRS has permitted businesses to deduct these payments in specific situations, even though paying the ransom is generally not advised. Naturally, companies will have to prove that the incident was real, and the deduction is not assured. However, in instances where this has been approved, it offers some respite to companies that are in the crossfire of cybercriminals.
Medical Expense Deduction for Prescription Drugs Used to Quit Smoking
Giving up smoking is a difficult task, and the IRS makes it easier by letting taxpayers write off the cost of prescription drugs that are meant to help them stop. This does not, however, apply to over-the-counter items that are not deductible, such as nicotine gum or patches. It’s possible that the costs of prescription drugs like Zyban or Chantix can be deducted from your medical expenses.
Taking Care of Children While Volunteering: A Tax Deduction
Volunteering is an exception to the general rule that childcare is not tax deductible. The IRS permits you to claim the cost of hiring a babysitter as a charitable contribution if you must do so in order to volunteer for a charity. Parents who are committed to giving back to their communities while juggling their family obligations benefit from this uncommon exception.
Body Oil for Bodybuilders: A Business Expense That Can Be Deducted
Professional bodybuilders can write off the cost of their oil as a necessary business expense, even though most people use it for moisturizing. Body oil is regarded as a normal expense for their occupation since it helps them display their muscles. This special tax law highlights the sometimes-overlooked aspect of the fitness industry, where even the oil used to lubricate muscles can lower operating expenses.
Memberships in Gyms for Medical Purposes
Although the majority of gym memberships are personal expenses, you might be eligible for a deduction if your doctor recommends a gym membership as part of your treatment for a medical condition. It will probably be more difficult for you to claim this deduction, though, if you were a gym member prior to being diagnosed. However, it offers a way for people whose health depends on their level of fitness to reduce their tax obligations.
A Medical Deduction for Certain Cosmetic Surgery
There are some exceptions to the IRS’s general rule that cosmetic surgery cannot be deducted. Surgery may be deductible if it is required to correct a deformity brought on by a disease, personal injury, or congenital abnormality. For those who require surgery for health rather than vanity, this unique tax rule provides some relief by reflecting the thin line between cosmetic and medically necessary surgery.
An example of a “feathered financial strategy” is the $75,000 Ostrich
A $75,000 ostrich was successfully deducted as a business expense by a rancher in Texas who claimed that the animal was required for breeding. After establishing the validity of his ostrich farm, the IRS accepted the deduction after first questioning the claim. The extent to which certain businesses can stretch their tax claims is demonstrated by this odd deduction. What’s the lesson here? Your tax deduction might occasionally be as peculiar as the company you manage.
| Bizarre Tax Deduction | Description |
|---|---|
| Swimming Pool | A swimming pool can be partially deductible as a medical expense if prescribed by a doctor for medical treatment. |
| Damages from Ransomware | Money paid to recover data from a ransomware attack may be deductible if you can prove the payment was necessary. |
| Prescription Drugs for Smoking | Medications prescribed to help quit smoking (like nicotine patches or gum) are deductible as medical expenses. |
| Hiring a Babysitter for Volunteering | Babysitter fees can be deductible if the only way you can volunteer for charity is by hiring a sitter. |
| Body Oil for Professional Bodybuilders | Professional bodybuilders can deduct body oil as part of their ordinary and necessary expenses for their profession. |
| Gym Memberships (Doctor-Ordered) | Gym memberships may be deductible if prescribed by a doctor as part of a medical treatment plan for a diagnosed condition. |
| Some Types of Cosmetic Surgery | Cosmetic surgery can be deductible if it’s related to correcting a deformity from injury, illness, or congenital issues. |
| $75,000 Ostrich | A Texas rancher once deducted the cost of a $75,000 ostrich, claiming it was for breeding purposes. |
| A Fake Kid (Phantom Taxpayer) | A taxpayer once tried to claim a non-existent dependent, but was caught by the IRS after a few years. |
“The Phantom Dependent” is a fake child
In one of the most ludicrous instances, a taxpayer attempted to claim a child as a dependent who was wholly fraudulent. The IRS failed to notice the obvious fraud right away, so the person was able to claim the child that never existed for a few years before being apprehended. A clear reminder of the extent some taxpayers will go to in order to lower their tax liability is provided by this case. This strategy was swiftly abandoned by the IRS, of course, but it was a strange case of inventiveness gone wrong.
Unusual but Real Tax Deductions
Even though these strange tax deductions may seem almost too good to be true, there are some situations in which they are permitted by law. These examples, which range from $75,000 ostriches to bodybuilders’ oil, demonstrate how the tax code is full of unforeseen opportunities for savings. To make sure your deductions are valid and to stay out of trouble with the IRS, it’s crucial to speak with a tax expert. Make sure you’re on the correct side of the law because these odd but real deductions could drastically lower a taxpayer’s tax obligation!
