When it comes to taxes, most people try to get the most out of their deductions. Obviously, nobody wants to pay more than their fair share in taxes. The list of deductions can range from legitimate to unlikely to flat-out ridiculous. When it comes to crazy tax deductions, however, we think that these five take the cake.
Cat People
Sometimes we all go a little bit crazy for our pets. But what happens when your “pets” aren’t really your pets? Well, that was the case when one couple who owned a junkyard tried to claim cat food as a tax write-off. The problem? This was cat food they would routinely sprinkle around the junkyard to lure in stray cats. They claimed they were using the cats to ward off snakes and rats. Although it may be considered odd to feed dozens of stray cats, because the cats were getting rid of pests on their business property, the IRS lawyers in Tax Court came to the conclusion that this was in fact a valid tax deduction.
Verdict: Approved
You’re Fired
Desperation makes people do crazy things. For one struggling business owner, desperation drove him to hire an arsonist to burn his failing furniture store to the ground. The plan seemed to work. The building burned, the business owner was set to receive half a million dollars in insurance money, and it looked like he was going to get away scot-free. But, the business owner got a little too greedy. When filing for his taxes, he added the $10,000 that he paid the arsonist as a “consulting fee.” Needless to say, the IRS (and court system) did not approve. Since he voluntarily tied himself to a crime, he did not get approved for the tax write-off, nor did he get to collect the insurance money.
Verdict: Denied
Going Broke from Breaking Bad
The television drama Breaking Bad was a smash hit about a high school chemistry teacher who decides to start cooking meth to pay the bills. While many loved the show, one man took it much further. He decided to try to emulate the main character, Walter White, by starting a meth lab of his very own. While he was cooking one day, a hot plate ignited his chemicals and started a fire that destroyed the entire building. Upset, he attempted to write off $9,000 on his taxes as a casualty loss. Surprisingly, the Tax Court allowed him to claim the write-off, despite the fact that what he was doing was completely illegal.
Verdict: Approved
Free Beer Isn’t Always Free
Businesses are always thinking of new promotions that will help attract new customers. One gas station owner was no different, and he ran a promotion that offered free beer to customers if they bought gasoline. While this may seem like a red flag for the IRS (and the police), the deduction stood. Turns out, despite how dangerous and irresponsible it seems, it was considered a legitimate business expense.
Verdict: Approved
I Do … Not Think That’s a Business Expense
Everyone loves weddings, and why wouldn’t they? They’re a great time for everyone to come together and celebrate. But, all of this fun can end up being expensive, so one business owner had what he thought was a brilliant idea for his daughter’s upcoming wedding: invite some potential clients to the wedding and write off the wedding as a business entertainment expense. Unfortunately for him, the IRS did not buy it, and the claim did not work out.
Verdict: Denied
The Final Verdict
While it may be fun to laugh at these crazy tax claims, everyone can get confused by taxes at times. It’s hard to know exactly what you can and can’t write off as a tax claim. You don’t want to pay more than you have to, so it’s important that the people handling your taxes know what they’re doing.
Corneliuson & Associates can make sure you pay only what you have to while assuring the deductions you make are warranted. Contact us today to learn how we can help you manage your money.