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18 Crazy-Sounding Tax Deductions That Are Actually Legit

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Taxed Message

It's human nature to want to keep money in your pocket rather than give it to Uncle Sam, which is why people and businesses come up with all manner of potential deductions as tax filing season rolls around. (Note: This year the filing deadline has been pushed back to July 15 due to the COVID-19 crisis.) From trying to write off breast enhancement to deducting the cost of at-home petting zoos, tax professionals have heard it all. Here are some of the most unusual, unexpected, or lavish deductions tax preparers have encountered over the years. (But if you have similar deductions in mind, it might be a Bad Idea to Do Your Own Taxes.)

An Oral-Health Clarinet
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An Oral-Health Clarinet

Using a clarinet to remedy an orthodontics issue is apparently a real form of treatment, and one that meets the approval of the IRS when it comes to tax deductions. Samuel Hicks, a CPA with Stern, Kory, Sreden & Morgan, said one of the quirkiest tax breaks he's come across is tied to a 1962 ruling from the IRS that allows deductions for the cost of a clarinet and lessons for playing it. "The only requirement is that an orthodontist should recommend the playing as a part of orthodontic treatment," Hicks said.

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Installing a Pool or Spa

If you can get your doctor to write a prescription for installing a pool or spa in your home, you might be able to write off part of the cost, says Janet Berry-Johnson, a CPA and tax expert for Money Crashers. "The key is the pool or spa has to be prescribed to alleviate or prevent a physical or mental illness or a medical condition," Berry-Johnson said. Unfortunately, since the pool or spa is also considered a capital improvement to your home, the entire cost of installation cannot be deducted. "You'd have to reduce your deduction by any increase to the value of your home that results from installing the pool," Berry-Johnson noted.

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Weight-Loss Programs

While you're unable to deduct the cost of weight-loss programs if you're pursuing the program merely for appearance or general health and wellness, if your doctor prescribes the program to treat a specific medical condition such as obesity, hypertension or heart disease, then the deduction is totally legitimate, says Money Crashers tax expert Berry-Johnson. "However, you still can't deduct special food or drinks or the cost of your gym membership," Berry-Johnson added.

Related: Strange But Real Tax Laws From All 50 States

Battling Lawn Equipment
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Lawn Maintenance

For business owners whose primary office or client meeting location is their residence, it may be possible to write off lawn care expenses, says Steve Sexton, financial consultant and president of Sexton Advisory Group, a California-based financial services firm. "This applies if the state of your lawn plays an important role in the performance of your business, such as acquiring and retaining clients," Sexton said.

Related: 40 Essential Tax Tips for Small-Business Owners

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Pet Moving Expenses

Many people are familiar with deducting moving expenses when relocating for a new job. Far fewer people realize it's also possible to deduct the cost of moving pets with you. "The IRS code per publication 521 states that you can deduct the cost of packing, crating, and transporting your household goods and personal effects and those of the members of your household from your former home to your new home," says Sexton of Sexton Advisory Group.

Related: 23 Tax Horror Stories That Will Make You Fear the IRS

babysitting
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The Cost of a Babysitter

It's hard to believe, but babysitting fees can actually be deducted, says Chayim Kessler, a CPA with MiamiBeachCPA. "The Child Tax Credit is applied to your expenses for daycare or hiring a babysitter while you're at work," Kessler said. "However, if you're out of the house for reasons other than work, you cannot file babysitter's payments for credit because such expense goes to your personal use."

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Painting Your Home Office

Through the home office deduction, you may be able to deduct the cost of painting your home work space, says Alexa Serrano, personal finance expert and banking editor for the website Finder. "How much you're eligible to deduct depends on whether you use the room exclusively for business," said Serrano. If the office is used entirely for business and nothing else, the entire cost of the paint is eligible for deduction as long as it doesn't exceed your total business income for the year. However, if the room is also used for living activities, then only a portion of the painting expense is deductible.

Ransom
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Ransom

It may seem like a page out of a Hollywood movie script, but it's not unusual for businesses to be victims of ransom demands from cybercriminals. Hackers steal everything from customer lists to company secrets that can be sold to competitors. Whatever amount of ransom ends up being paid as part of such an incident is tax deductible. "If a business owner paid the ransom, the business can receive a tax deduction providing the business files a report with the SEC and local police. If the business owner did not file a report, the business cannot deduct the ransom," said Sexton, financial consultant and president of Sexton Advisory Group.

A Petting Zoo
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A Petting Zoo

Early in Donna Merrill's career, the small-business tax expert had a client who wanted to write off a petting zoo for a home-based direct sales business. The justification? Frequent home meetings with clients whose kids could be entertained by the animals. Merrill, founder of Business Untangled, asked a tax pro who told her to "position the deduction strategically on the tax return with very visible notes to be seen upfront." The advice worked. The deduction has been accepted by the IRS for many years. Merrill says you can write off almost anything in your business if you can prove it is an ordinary and necessary expense incurred in running your business. "It needs to support your profit intent," Merrill said.

Private Jet Rentals
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Private Jet Purchase

As over-the-top as this deduction sounds, purchasing a jet can be a legitimate expense for a business. According to new tax regulations that were part of the Tax Cuts and Jobs Act, businesses that purchase a new or pre-owned jet and start using it before Jan. 1, 2023 can write off practically every cent associated with the purchase for the first year. However, businesses must exclude any costs associated with using the jet for entertaining.

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Gambling Losses

Losing in Las Vegas or any other gambling mecca is rarely fun. But the good news is that the IRS allows for writing off some of those painful losses. Yes, you read that right. Those who itemize deductions on Schedule A and who kept a record of their winnings and losses may write off the losses. Good to know, right?

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Dry Cleaning When Traveling for Work

Traveling for work can have its share of pros and cons. But it's never fun when you show up for a work-related engagement on the road and your clothes are dirty, stained or otherwise less than presentable. The good news is that the IRS allows for deducting the cost of any dry cleaning or laundry you require while globetrotting for work.

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Streaming Music Services

While this deduction might seem like a bit of a stretch, it turns out that if you use services such as Spotify in the office to provide entertainment for people while they wait, or in a store where customers shop, it's legitimately deductible. "A business generally can deduct anything that's ordinary and necessary in the course of carrying on a trade or business," said Mike Kern, CPA and co-founder of Kore Talents. "The cost of a streaming service to provide a proper environment to your customers would definitely fit the ordinary and necessary requirement."

Cosmetic Surgery
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Cosmetic Surgery

Looking good at all costs is par for the course in the entertainment industry, where appearance is definitely a factor in generating income. So, it stands to reason that some cosmetic surgery would be viewed as legitimate write-offs by the IRS. The main criteria is that the surgery can reasonably be expected to generate more income. Perhaps the most famous case is breast implants being claimed as a deduction was an exotic dancer Chesty Love who made the claim that bigger breasts would generate bigger tips. The IRS consented to the write-off describing the breasts as a stage prop essential to her act.

bdsm props
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Leather Clothes, Whips, and Handcuffs

The most interesting tax deduction CPA Logan Allec has ever written off on a client's return involved leather clothes, whips, and handcuffs. "This was for a dominatrix running a successful dungeon here in the Los Angeles area," says Allec, founder of personal finance site Money Done Right. "This probably goes without saying, but hers was a legitimate business. No sex or nudity was involved, only harm-free bondage." While Allec says there isn't a section of the tax code that specifically allows for whips and handcuffs as a deduction, the expenses fall under the general rule of Internal Revenue Code Section 162(a), which covers deductions for ordinary and necessary expenses paid or incurred in running a trade or business.

Related: 17 Tax Law Changes You Need to Know in 2020

Paying a Lover to Work for You
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Paying Your Significant Other to Work for You

Paying your significant other to work for you may very well be legitimately deductible. In yet another filing that tested IRS limits, a taxpayer paid his live-in girlfriend to do everything from finding furniture to supervising repairs at various properties. The IRS initially balked at writing off the salary. The resulting clash ended with a court saying $2,500 of the $9,000 he paid her was a business expense, but paying for her housekeeping was nondeductible. "Paying someone to help manage rental properties or find furniture could be considered a business expense regardless of your relationship with the person you are paying," said Allec, of Money Done Right. "However, you cannot deduct the amount you pay your girlfriend to clean your house in the same way you cannot deduct the allowance you pay your children to do chores."

ATM Fees
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ATM Fees

Most of us just have to live with annoying and pricey ATM fees. But if a business owner decides the best way to pay themselves is to take cash withdrawals out of an ATM that charges fees, those fees are tax deductible. "ATM fees for business accounts are deductible assuming the cash withdrawal was used for a business purpose," said Allec of Money Done Right. "But obviously it'd be better to go to an ATM where you won't be charged a fee."

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Food for Stray Cats

One last unusual deduction that ultimately was allowed, a couple who ran a junkyard claimed cat food expenses as a write-off. Their rationale? The food was used to attract cats and the cats controlled the snakes and rats in the junkyard. While the IRS balked at that, a Tax Court ruling allowed the deduction.