Monday, April 18 is tax day 2011, and some Americans will attempt to slip some very creative tax write offs by the Internal Revenue Service. From flattop haircuts to human sperm contributions, auditors have seen it all. Don’t take these as examples, however marvel at the ingenuity – or laziness, or lunacy – that went into these crazy attempts at tax write offs. Source for this article – Bizarre tax deductions to brighten your tax day by MoneyBlogNewz.
Minister looking for real estate
Bankrate reports that CPA Ken Sibley knew a male who tried to claim travel and entertainment expenses as tax deductions as a minister. After trying for years, the minister never found real estate investment properties, even though he was trying to. This could not be considered business expense. It could have if anything were purchased.
A wedding is not a charity
Getting married isn't enough to deduct expenditures. It cannot be a part of business expenses being deducted. Clients attending the wedding doesn't make it business related. A Massachusetts CPA said it will not work, regardless how you swing it. And remember: your betrothed isn’t a charity, so there is no way can count wedding expenditures as charitable donations, either.
Expenditure taking 30 years
New Jersey CPA Don Meyer spoke of the business manager of a famous entertainer who arranged for the purchase of a $2 million office building. It would be business expense and deducted as one. The manager wanted to use it that year for it. The business manager was at a loss though since the complete expense would take over 30 years to recover. The law would not change regardless how much money there was to spare.
Don't try to count a dog
A home-based business can produce legitimate tax write offs, but claiming pets as security expenses won’t fly. Home security systems in general do not fly with the IRS, either, says the Hunter Group of Fair Lawn, N.J. One woman said that if someone came into her home and killed her, she would not be able to pay taxes anymore which mean she should be able to deduct her home security system.
Do not try to deduct adult magazines
Tax deductions for dues and subscriptions to professional and trade publications do work. You have to be in that field though. According to Quizlaw, these would go under miscellaneous as long as the 2 percent floor rule is met. This means it must account for 2 percent or more of the adjusted gross income.
Business strategy for a self-employed real estate agency should not contain adult magazines in business deductions. A Massachusetts CPA Explained this isn’t something you should be doing.
Once, Don Meyer had a prostitute client. That was different. Declaring her income was significant to her. She said her job was in "public relations."
Citations
Bankrate
bankrate.com/finance/taxes/10-craziest-tax-deductions-for-2011-1.aspx
IRS
irs.gov/businesses/small/article/0,,id=204169,00.html
Quizlaw
quizlaw.com/federal_income_tax/can_i_deduct_dues_and_subscrip.php
On deducting haircuts and sperm donations
youtube.com/watch?v=uW6HWOekZ3M
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