Anything tax related is typically no laughing matter, but we’ve heard a few stories that have led to fits of uncontrollable giggling followed by sighs of disbelief. As a tax paying American, you have many options to reduce your tax bill, but are some taking things too far?
We talked to three tax experts about some of the most ridiculous things they’ve seen their clients attempt to write off.
Ronica Brown, CPA at Ronica Brown Agency
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$3,000 handbag from Nordstrom categorized as “work uniform.” If a designer handbag is a required part of the work uniform, we wonder what the dress code is?
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Honeymoon plane tickets marked off as “business trip.” Really?!
Brianna Bond, Founder and President at Ledger
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An entire purchase from an Adam & Eve sex shop as “office supplies.” Good luck explaining that one to the IRS!
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Educational material on ‘how-to pick-up women’ categorized as continuing education. It was a men’s rights activist who attempted to write this off.
Rob Tamburri, CPA and Managing Partner at Balog + Tamburri, CPAs
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Funeral expenses. Huh?! We understand that funeral expenses are not cheap, but this is a big no under every circumstance.
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Private school tuition for kids. “This would only be allowed if your child is attending a private school due to a medical disability that requires special education,” says Tamburri. “Even so, it is only deductible if the expense exceeds a certain percentage of your adjusted gross income (10% of your AGI for 2019).” This is more common than you may think and what’s even more troubling is that many are writing this off as a charitable donation.
Pretty crazy list, right?
There are many ways you can be savvy and creative with your taxes, but make sure what you’re doing is compliant, please!
THE BOTTOM LINE:
While we hope these ridiculous attempted tax deduction stories brighten your day, we want to stress that tax compliance is no joking matter.
If you were to get audited by the IRS, could you justify every single one of your deductions?
Don’t find yourself in a position where you have to explain to the IRS why you deducted $5,000 in dry cleaning expenses and categorized it as ‘work uniform’ when on page 1 of that same tax return you claimed to be a freelance writer who works from home. It’s just not worth it.
The last person you want to mess with is the IRS.
