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Totally Money Blog Carnival – Outrageous tax deduction edition

Welcome to the 8th edition of the Totally Money Blog Carnival! Everywhere you turn in the personal finance blogosphere, taxes are one of the hottest topics (I have one coming up today as well). So I decided to combine taxes with some humor for Monday morning. I have included some outrageous tax deductions claimed by people. Hope you enjoy this edition!

burning house Burning down the house : A furniture store owner, after many failed attempts to sell his store, hired an arsonist to burn down the store. He collected $500,000 and paid the arsonist $10000. A year later, he claimed the $10000 he paid to the arsonist as a “consulting fee” in his tax return! No, it didn’t work. Both of them are in jail.

Budgeting

 

cat food Cat Food : A junkyard owner, tired of rats and snakes, set out bowls of cat food to attract wild cats. The cats were happy, stayed and kept the place free of rats, making the place more pleasant for customers. They deducted the cat food as a business expense and it was allowed.

 

Credit

african safari cows Dairy cows on a wild African safari : A group of dairy farm owners went on an African safari and tried to claim their expenses saying that many of the dairy’s promotional activities and advertising included wild animals. Don’t know what they learned on a wild safari, but the IRS allowed the expenses as ordinary and necessary.

Economy

Free beer Free beer : A gas station owner gave free beer to his customers, don’t know if he thought drunk customers would fill up more than needed. Anyway, he claimed that as a business expense and it ended up in tax courts. The ruling was – yes it was allowed!

 

Finance

 

mink coat Mink coat : A man tried to deduct his wife’s mink coat by justifying that the mink coat was a conversation piece when visiting clients with his wife. Don’t know what they would discuss and why his wife was with him when he visited clients, but the IRS rejected the claim.

 

 

Frugality

Breast augmentation : This is an infamous story. A stripper going by the name Chesty Love used her savings to umm… improve her assets to bring it up to 56FF in an effort to get more tips. She wrote the expenses off in her return and it was allowed!!! Sorry no pics :)

Money Management

trip to bermuda Trip to Bermuda : Any business convention held in Bermuda can be written off without even showing there was a special reason to hold your business meeting in an exotic location. Bermuda is not the only place, Mexico, Canada, Jamaica, Costa Rica or St. Lucia or any US possession would qualify.

 

Savings

  • Kevin McKee presents Force Yourself to Save posted at Thousandaire saying “Do you want to save money, but you have a hard time putting money away and keeping it there. Here are 5 great ways to force yourself to save money,”
  • Tim Fraticelli presents Should You Have Multiple Emergency Funds? posted at Faith and Finance saying “An open discusson on the benefits of creating different emergency funds. I hate tapping into my primary emergency fund for less important items, so having smaller e-funds made sense to us. It’s really about planning ahead and smaller funds can help.”
  • Dave@50plusfinance presents How Do I Motivate My Son to Save Money? posted at 50 Plus Finance saying “In life I believe most people are not born savers. So take this into account when your trying to help someone change direction. I was a spender for most of my life and did not change direction until I was forced to, out of necessity.”

 

trip to superbowl Trip to Super Bowl : A trip to Bermuda might not need justification, but a “business” trip to the Super Bowl would. A couple arranged a trip to see the super bowl along with their business partners and their wives. They tried to deduct that as a business expense. The IRS didn’t buy that and claimed they “can’t have discussed anything business related”.

Spending

body oil Body Oil : A pro bodybuilder used body oil to make his muscles glisten in the lights during his competitions. The Tax Court ruled that he could deduct the cost of the oil as a business expense.

Taxes

  • Money Crashers Blog presents List of 14 Commonly Overlooked Personal Tax Deductions For Individuals posted at Money Crashers saying “The only thing worse than paying taxes, is paying more than you have to. With this year’s tax filing deadline coming up, make sure you’re getting every penny you deserve by checking if you’re eligible for these 14 little-known tax deductions. “
  • Jim Yih presents Marginal Tax vs Average Tax posted at Retire Happy Blog saying ” Marginal tax is simply the amount of tax paid on an additional dollar of income. As income rises, so does the tax rate. This is different than a flat tax rate where you pay the same rate of tax no matter what your income level is. “
  • Ryan @ MFN presents IRS Refund Schedule posted at The Military Wallet saying “Each year the IRS releases a refund schedule for those who use e-file to file their taxes with the IRS. This makes it easy to know when you will receive your tax refund”
  • Outlaw presents 5 Famous Tax Evasion Cases posted at Outlaw Finance saying “With tax season in full swing, it makes sense to ensure you’re staying on the positive side of the IRS. See these cautionary tales about evading taxes.”
  • Madison DuPaix presents IRS Form W9 posted at My Dollar Plan saying “Find out how to fill out a W9 form here.”

private jet Private Jet to check on their condo : Rather than drive five to seven hours to check on their rental condo or be tied to the only daily commercial flight available, a couple bought their own plane. The Tax Court allowed them to deduct their condo-related trips on the aircraft, including the cost of fuel and depreciation for the portion of time used for business-related purposes, even though these costs increased their overall rental loss.

Travel

fido day care Pets are not dependents : A man felt his dog was lonely during the day, so he hired someone to give his Fido some company, while he was off at work. Everything was fine until he tried to deduct “day care” expenses as part of the dependent care credit. No, IRS didn’t allow that.

Other

Hope you enjoyed this edition of the Totally Money Blog Carnival! The next edition will be hosted by My Personal Finance Journey, don’t forget to submit your entries.

{ 14 comments… read them below or add one }

Echo

Thanks for including Boomer’s article on how to get the most out of your savings.

I like the free beer at the gas station, although I’ve yet to come across that one :)

Cheers!

Reply

Ryan

Love the tax deduction anecdotes. Thanks for hosting! :)

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JT McGee

Thanks for the inclusion.

I wish I could have known your theme would be whacky tax credits, I would have submitted a post about tax credits for breastfeeding. LOL

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Miss T @ Prairie EcoThrifter

Thanks Suba for including my article. Great job on hosting the carnival. I liked the story about the dog sitter. I know people who have used a pet sitter but I hadn’t heard of anyone trying to deduct it on their taxes.

Reply

FIRE Finance

Thanks for hosting the carnival and including our post. Best wishes ahead :).

Cheers,
FIRE Finance

Reply

Buck Inspire

Thanks for including me and your hard work! :) What a huge carnival. Is it just me or does the amount of articles and participants seem to be growing? Woohoo!

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Robert @ The College Investor

Thanks for including my Best Buy experience!

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MoneyCone

Thanks Suba for the awesome carnival!

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Charles Chua C K

Thanks for the acceptance of my article.

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Dave@50plusfinance

Great Carnival. Those tax tips I would avoid.

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Tim @ Faith and Finance

Thanks for including my article Suba! I might just need to go to Bermuda and hold some business meetings :)

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Alex

Thanks for this Carnival! Appreciate for including my article

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Barb Friedberg

Very clever theme. You put a lot of work into this one! Thanks for including my article.

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Greg McFarlane

Thanks for including the story of our victory over American Express. We’ve already defeated Discover, MasterCard and VISA, making us 4-0. Next up, JCB.

Reply

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