Posted by Nancy Hecht, CFP®, AIF®
We always hear of wacky things that people try to deduct from their taxable income – these happen to be deductions that, surprisingly so, worked.
When I was in high school, I was trying to decide between art school and business school. I decided I did not want to be a starving artist – who knew that if I went down that path, I could have this deduction:
If you are a “performing artist,” you may be able to deduct your business expenses if you have at least two employers. If each has paid you at least $200, and your expenses are 10% of what you make, you can take a deduction if your AGI is less than $16,000.
Are you a cat lover? This may work for you;
A couple bought cat food for feral cats that congregated at their junk yard. The cats help keep the rat and snake population down, making the junk yard safer for customers. The couples argued this before the IRS and were allowed to keep the deduction.
In this case, beer and gasoline do go together:
A gas station owner offered free beer with a fill-up. The owner’s sales increased a lot and in Tax Court the owner argued successfully that the cost of the beer was a business expense.
You can get creative, to a point with your deductions, but make sure you consult a tax professional if you will be pushing the envelope with your own wacky deduction.