I recommend to everyone that they look at all of their expenses and be sure that they are taking the most tax deductions they can. However, I cannot stress to you enough that you don't want to go too far with your tax write offs and end up getting yourself into trouble with the IRS. When you work in the tax business for long enough, you hear quite a few stories where people tried to pull one over on the tax man, and took what many would consider a ridiculous tax deduction. Here are some of the more dubious tax deductions I've heard of.
A male model once tried to write off his entire wardrobe, claiming that as part of his business he had to look good at all times. This didn't fly, because you are only allowed to deduct a uniform or clothing that you wouldn't wear out in public in a social situation. So you can't write off a business suit, and certainly not your entire wardrobe.
Many people try to claim their hobbies as tax deductions, for example a Hollywood set electrition tried to write off the cost of buying and renting DVDs, and a professor of Italian culture and European art tried to deduct theater and concert tickets. The issue is whether or not the expense is for legitimate business purposes. One crazy sounding deduction that was acceptable was a university doctoral student studying the relationship of comic books to the societal values of the era was able to properly deduct several thousands of dollars of comic book purchases. Just because it sounds crazy doesn't mean you can't do it.
One taxpayer felt that their dog shouldn't be left alone all day, so tried to clam a day care tax credit for the dog-sitting expense. While the dog is clearly an economic dependent, it cannot be claimed for tax purposes.
One man lost his dentures when they fell in the toilet, and tried to clam an act-of-God casualty loss on his return.
A Spanish teacher tried to claim the cost of his TV and cable service as a deduction, claiming that the only reason he got the TV and cable was to have access to the Spanish channel, so he could teach his students better.
There was a furniture store owner who couldn't sell his business, so he hired an arsonist to burn the place down so he could collect the $500,000 in insurance money. When he filed his return, he listed a $10,000 consulting fee. Turns out this is the money he used to pay the arsonist! An IRS audit landed them both in jail, and got him a few thousand dollars in fines for misfiling his return.
It's never a good idea to try to slip one by the taxman, especially when there are so many legitimate tax deductions that can be used to lower your taxable income. If you have a deduction and you wonder whether it will work or not, seek the advice of a professional. You can sign up below for a free tax strategy session with a trained tax professional. This consultation will help you identify the tax write offs that apply to your unique situation. This could end up saving you thousands of dollars every year!