
Everyone wants a tax break. Here are six creative ways some Americans have gotten them.
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FICA explained: What to know about Social Security, Medicare tax rates
FICA, the Federal Insurance Contributions Act, is the federal payroll tax. Here's what taxpayers need to know.
Everyone's always trying to pay less tax, hunting for as many tax deductions as possible to cut their tax bill.
Most Americans know charitable gifts, retirement contributions, student loan and mortgage interest are tax-deductible, but like kids, some taxpayers will test the limits to see what else the IRS will allow. Americans may be surprised by what the IRS has let squeak by.
Over the years, the IRS has allowed some unusual tax deductions, but the circumstances were very specific. Basically, taxpayers must prove the items were necessary or a legitimate business expense. They can't be personal expenses.
Here are examples of extraordinary deductions taxpayers have asked for and received from the IRS. It's important to note that even though these were approved, accountants recommend you consult with a professional before pursuing any offbeat deductions.
Baby oil
Most Americans can't take a tax deduction for baby oil but what if it's necessary for your work?
In 1984, the Tax Court ruled a professional bodybuilder who used body oil to make his muscles glisten in the lights during his competitions could deduct the cost of the oil as a business expense.
However, the Court declined tax deductions for buffalo meat and special vitamin supplements to enhance strength and muscle development, according to TurboTax.
Breast implants
Cosmetic surgery is usually a personal expense and isn't tax-deductible.
In 1994, however, self-employed exotic dancer Cynthia Hess (aka Chesty Love) won her tax case allowing her breast implants in 1988 to be considered a legitimate business expense and could, therefore, have the cost be deducted. She argued that they were necessary to earn a living and that she otherwise wouldn't have enlarged her breasts 'to such an extent that they made her appear 'freakish.''
The court decided the breast implants satisfied a two-part test: (1) required as a condition of employment and (2) unsuitable for everyday use. The breasts were analogous to a 'costume,' necessary for her job to make money, and because of how large they were, they were unsuitable for everyday use but unable to be removed daily.
A trip to the Caribbean
Business in the sun can be tax deductible!
Conventions in many Caribbean islands as well as Mexico and Canada are deductible without having to show that there was a special reason for the meeting to be held there, TurboTax said. Caribbean islands that get special tax treatment include Bermuda, Barbados, Costa Rica, Dominica, the Dominican Republic, Grenada, Guyana, Honduras, Jamaica, and Trinidad and Tobago.
Favorable tax treatment doesn't apply anywhere else in the world unless you show why the meeting had to be held there, TurboTax said.
Private jet
John and Joanna French won their case in 1990 to write off their private jet on their 1984 taxes. They argued that they used it to fly from their home in San Jose, California to manage, advertise and rent their condo in Mammoth Lakes, California, instead of driving 5½ to 7½ hours each time. They argued that because the two worked full time, it was reasonable for them to use a private jet to fly there to use their time efficiently rather than rely on the one commercial flight a day to Mammoth Lakes.
The IRS argued that Mammoth Lakes was a vacation destination, and these trips were personal expenses.
Ultimately, the court decided that given the circumstances, and if the Frenches were flying there to personally manage their condo, the expense was reasonable and therefore, tax deductible.
Pets
If you just have pets "around to love on and spend time with, even if you feature them in a social media post, that animal wouldn't be an eligible tax deduction,' said Catherine Kauffelt, head of tax compliance at Collective, an online back-office platform service. That includes emotional support animals, which aren't considered service animals because they're not specifically trained to support a condition.
But there are some instances when pet-related deductions can be allowed:
In 1995, scrap yard owner Samuel Seawright won a $300 deduction for cat food by arguing he had to set out cat food to attract wild felines to prevent snakes and rats from entering his scrap yard. The key here is that it was used for his business.
In 2011, Jan Elizabeth Van Dusen won a $100 deduction for expenses related to fostering a cat. The expenses qualified as unreimbursed expenditures for services to a charitable organization, the court ruled. Note, however, that expenses of $250 or more would need written acknowledgement from the charity.
If you're in the military, you can deduct the cost of moving your personal items to a new home, and household pets are treated the same as your other personal property, the IRS says.
Expenses related to service animals may be deductible as medical expenses, the IRS says.
Unbelievable: Cat food and tanning oil? 6 outrageous tax deductions the IRS approved
Swimming pools and other health aids
If you just want to go to a gym to get some exercise or stay in generally good health, your membership won't be deductible.
But if your doctor prescribes something 'to alleviate or prevent a physical or mental disability or illness,' you might be eligible for a tax break, the IRS says. That 'something' can be a swimming pool, for example, if you need hydrotherapy to treat a condition.
Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
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