When we think of tax breaks, we normally think of the boring things we all claim: charitable contributions, Earned Income Credit, and mortgage interest. We might think about our business expenses, or deductions for things like moving and student loan interest if they apply.
However, when it comes to tax breaks, there are some that seem a little crazy. If you can make a good case for a tax break, though, you might be surprised at what you might be able to get away with.
1. Live-In (Non-Spouse) Significant Other
Most of the time, if you want to claim a significant other on your taxes, you need to tie the knot so you can file jointly. However, there was a case in which a man hired his live-in girlfriend to run his household. Her “job” was to arrange for rental property repairs and to find furniture and perform other household duties.
He didn’t get to claim the full deduction. The amount paid for some of the items, such as overseeing rental property transactions, was considered a business expense, but the housekeeping didn’t “count.”
2. Landscaping Costs
Do you work out of your home? You might be able to deduct some of your landscaping costs. As long as you regularly meet clients in your home and your landscaping contributes to the professional aesthetic, you might be able to deduct at least some of your costs — but probably not all of them. Always check with a tax professional before deducting landscaping costs.
3. Cosmetic Surgery
There have been some instances in which exotic dancers and others in similar lines of work have been able to deduct their cosmetic surgery. In one case, the dancer’s implants were considered “stage props” that were designated as depreciable assets. Professional bodybuilders have been able to deduct oil for competitions, and there are other instances of similar situations.
4. Swimming Pool
Could a swimming pool ever be a medical deduction? Maybe. In one case, someone had been ordered to exercise for his health, so he installed a swimming pool. The court actually allowed the deduction, since the primary purpose of the pool was supposed to be medical care.
Turn Almost Anything Into a Potential Tax Deduction
One strategy you can use to turn almost anything into a potential tax deduction is to use a taxable investment account for your emergency fund. If you have the risk tolerance for this strategy, you can sell some of your investments at a loss, and receive a tax deduction. Then, use that money for something else.
I used this strategy when my basement flooded a few years ago. Groundwater wasn’t covered in my homeowner’s policy, so I was responsible for carpet and other costs. I sold some of my own investments, took the loss, and paid for the related costs with the proceeds. That resulted in a capital loss deduction. This also is a strategy I use to save up for vacations. If you save enough over time, you can liquidated some of your losing investments, and still get the advantage of the capital, plus take the tax deduction if you sell at a loss.