cccasooner2
12/23/2010, 02:42 PM
Hey! No groaning. This is money in the bank. And who said tax deductions aren't fun? Check out these 12 wacky tax deductions:
1. Drycleaning
If you go on a business trip, you can deduct the cost of drycleaning the clothes you wore. But Jerry Lynch, a certified financial planner and owner of JFL Consulting in Fairfield, NJ, cautions that you should do it the day you get back — and only the clothes you brought with you.
2. Chicken Wings
Lynch is a season-ticket holder for the New York Giants and will often invite clients or other business associates along for a tailgate before the game. He says you can deduct the cost of the tailgate as long as you talk about business — even if it's just, "How's business?" … "It's great, but I can always use more!"
This actually goes for any party you throw. So, while it's not good to be all business all the time, it's in your financial interest to bring it up at least once!
3. A Swimming Pool
The IRS lets you deduct anything that's a "necessary medical expense." After being told by his doctor that he needed to exercise more, one man put in a swimming pool and deducted it on his taxes! The IRS not only allowed him to deduct the cost of installing the pool but also everything for its upkeep such as the chemicals, heating, cleaning costs, etc., according to TurboTax.
4. A Cruise
C'mon, people, think outside the box! If you are going on a business trip, no one says you have to take the fastest method possible, Lynch explains. So, why not take a cruise from L.A. to that marketing convention in Honolulu? As long as it's transportation to a business-related meeting or event, you can write it off. Alohaaaaaaaa!
5. A Safari
Now that we've got both feet firmly planted outside the box, we're going on a safari! TurboTax recalls one couple who owned a dairy business and successfully wrote off an African Safari because many of the activities on the trip were focused on wild animals. Yes, Virginia, there are cows in Africa!
And if you're still dubious of the business expense, check out this account of one man who spent 15 years observing cows in Africa.
6. Lessons in Vail
So you need to take a training class for work. Well, guess what? No one said you had to take it locally. "I could take an educational seminar in Aspen, Vail or Hawaii," Lynch explained. The airfare, hotel, etc. — it would all be deductible "as long as I'm spending a portion of my time in that seminar," Lynch said.
7. A "Meeting" in Bermuda
Next stop … Bermuda! You already know that you can write off meetings, conventions and training. But Bermuda gets its own call out because "ANY business convention held in Bermuda can be written off without even showing there was a special reason to hold your business meeting in paradise," Lynch explains. But wait, don't answer yet. You also get the same perks in Barbados, Costa Rica, Dominica, the Dominican Republic, Grenada, Guyana, Honduras, Jamaica, Saint Lucia, Trinidad and Tobago, Canada, Mexico and all U.S. possessions, according to TurboTax.
But let the paradise lover beware: These rules don't always apply to places outside the U.S., so check with the IRS rules first.
Would you like a little umbrella for your drink?
8. Pet Food
Rats! No, seriously, rats are a very big, very deductible problem for some business owners. TurboTax recalls owners of a junkyard who became fed up with their snake and rat problem. So, they cleverly set out bowls of cat food to attract wild cats, who ate the pet food and chased it down with rats and snakes. Poof! No more varmint problem. "Because the wild cats made the business safer for customers, the pet food was deductible as a business expense," Meighan explained.
9. Clarinet Lessons
When kids learn an instrument, it's never pretty. Haven't you ever thought, wow, someone should compensate me for having to listen to this racket? Well, Dad, that person is the tax man! Parents can deduct children's music lessons and the cost of buying the instrument if there is some proven medical reason. In the case of the clarinet lessons, the IRS approved it on the grounds that orthodontists say clarinet playing can help with a child's overbite, according to TurboTax.
10. Babysitting Costs
Wouldn't it be great if someone split the babysitting bill with you? Ding! Enter the tax man. "Believe it or not, you can deduct the cost of a babysitter as a charitable deduction IF the mother of the child is leaving the house to do volunteer work for a charity. Which, of course, we all do on a daily basis!" Meighan quips.
11. Putting Your Adult Kids to Work
Finally! An excuse your kids can't argue with when you tell them to get a job. This one's tricky, so pay attention: If you own your own business and hire your kids who are over 18 to work for you, much of their income is either tax free or low tax, Lynch explains. The first $5,700 they earn is tax free and the next $8,300 is taxable at 10 percent, not the 30 percent or so that most of us pay. Plus, you can take a business tax deduction on the wages you pay them. Lynch, in turn, has his kids use the money he paid them toward their college education. "Your kids are ending up with your money anyway, who not save some of it?" he quipped.
12. Safety-Deposit Boxes
Wow, with all this money you're saving, you'll need someplace to put all your valuables. Guess what? Also tax deductible! Well, here's the catch: The cost of that safety-deposit box is deductible as long as it contains income-producing papers such as stock certificates, Sepp explains.
Be careful about getting too carried away with wacky tax deductions, Lynch cautions.
If the IRS thinks any of your items are questionable, they'll request additional clarification. If they're not satisfied, they reserve the right to reject your deduction, which would result in back taxes, interest and possible fines — not to mention the potential for an audit.
"My line with the IRS is that if I irritate my wife, I can always buy her flowers. Irritate the IRS, and you have an enemy for life!" Lynch quips.
Suddenly, reading IRS publication 529 doesn't sound so bad anymore!
http://finance.yahoo.com/taxes/article/111626/wacky-tax-deductions-from-chicken-wings-to-cruise-ships?mod=taxes-advice_strategy
1. Drycleaning
If you go on a business trip, you can deduct the cost of drycleaning the clothes you wore. But Jerry Lynch, a certified financial planner and owner of JFL Consulting in Fairfield, NJ, cautions that you should do it the day you get back — and only the clothes you brought with you.
2. Chicken Wings
Lynch is a season-ticket holder for the New York Giants and will often invite clients or other business associates along for a tailgate before the game. He says you can deduct the cost of the tailgate as long as you talk about business — even if it's just, "How's business?" … "It's great, but I can always use more!"
This actually goes for any party you throw. So, while it's not good to be all business all the time, it's in your financial interest to bring it up at least once!
3. A Swimming Pool
The IRS lets you deduct anything that's a "necessary medical expense." After being told by his doctor that he needed to exercise more, one man put in a swimming pool and deducted it on his taxes! The IRS not only allowed him to deduct the cost of installing the pool but also everything for its upkeep such as the chemicals, heating, cleaning costs, etc., according to TurboTax.
4. A Cruise
C'mon, people, think outside the box! If you are going on a business trip, no one says you have to take the fastest method possible, Lynch explains. So, why not take a cruise from L.A. to that marketing convention in Honolulu? As long as it's transportation to a business-related meeting or event, you can write it off. Alohaaaaaaaa!
5. A Safari
Now that we've got both feet firmly planted outside the box, we're going on a safari! TurboTax recalls one couple who owned a dairy business and successfully wrote off an African Safari because many of the activities on the trip were focused on wild animals. Yes, Virginia, there are cows in Africa!
And if you're still dubious of the business expense, check out this account of one man who spent 15 years observing cows in Africa.
6. Lessons in Vail
So you need to take a training class for work. Well, guess what? No one said you had to take it locally. "I could take an educational seminar in Aspen, Vail or Hawaii," Lynch explained. The airfare, hotel, etc. — it would all be deductible "as long as I'm spending a portion of my time in that seminar," Lynch said.
7. A "Meeting" in Bermuda
Next stop … Bermuda! You already know that you can write off meetings, conventions and training. But Bermuda gets its own call out because "ANY business convention held in Bermuda can be written off without even showing there was a special reason to hold your business meeting in paradise," Lynch explains. But wait, don't answer yet. You also get the same perks in Barbados, Costa Rica, Dominica, the Dominican Republic, Grenada, Guyana, Honduras, Jamaica, Saint Lucia, Trinidad and Tobago, Canada, Mexico and all U.S. possessions, according to TurboTax.
But let the paradise lover beware: These rules don't always apply to places outside the U.S., so check with the IRS rules first.
Would you like a little umbrella for your drink?
8. Pet Food
Rats! No, seriously, rats are a very big, very deductible problem for some business owners. TurboTax recalls owners of a junkyard who became fed up with their snake and rat problem. So, they cleverly set out bowls of cat food to attract wild cats, who ate the pet food and chased it down with rats and snakes. Poof! No more varmint problem. "Because the wild cats made the business safer for customers, the pet food was deductible as a business expense," Meighan explained.
9. Clarinet Lessons
When kids learn an instrument, it's never pretty. Haven't you ever thought, wow, someone should compensate me for having to listen to this racket? Well, Dad, that person is the tax man! Parents can deduct children's music lessons and the cost of buying the instrument if there is some proven medical reason. In the case of the clarinet lessons, the IRS approved it on the grounds that orthodontists say clarinet playing can help with a child's overbite, according to TurboTax.
10. Babysitting Costs
Wouldn't it be great if someone split the babysitting bill with you? Ding! Enter the tax man. "Believe it or not, you can deduct the cost of a babysitter as a charitable deduction IF the mother of the child is leaving the house to do volunteer work for a charity. Which, of course, we all do on a daily basis!" Meighan quips.
11. Putting Your Adult Kids to Work
Finally! An excuse your kids can't argue with when you tell them to get a job. This one's tricky, so pay attention: If you own your own business and hire your kids who are over 18 to work for you, much of their income is either tax free or low tax, Lynch explains. The first $5,700 they earn is tax free and the next $8,300 is taxable at 10 percent, not the 30 percent or so that most of us pay. Plus, you can take a business tax deduction on the wages you pay them. Lynch, in turn, has his kids use the money he paid them toward their college education. "Your kids are ending up with your money anyway, who not save some of it?" he quipped.
12. Safety-Deposit Boxes
Wow, with all this money you're saving, you'll need someplace to put all your valuables. Guess what? Also tax deductible! Well, here's the catch: The cost of that safety-deposit box is deductible as long as it contains income-producing papers such as stock certificates, Sepp explains.
Be careful about getting too carried away with wacky tax deductions, Lynch cautions.
If the IRS thinks any of your items are questionable, they'll request additional clarification. If they're not satisfied, they reserve the right to reject your deduction, which would result in back taxes, interest and possible fines — not to mention the potential for an audit.
"My line with the IRS is that if I irritate my wife, I can always buy her flowers. Irritate the IRS, and you have an enemy for life!" Lynch quips.
Suddenly, reading IRS publication 529 doesn't sound so bad anymore!
http://finance.yahoo.com/taxes/article/111626/wacky-tax-deductions-from-chicken-wings-to-cruise-ships?mod=taxes-advice_strategy