The IRS has seen some pretty wild tax deduction attempts over the years, and some of them actually worked! Check out our list of the 10 craziest tax deductions you have ever heard of! And if you’re a freelancer, don’t miss our other blog: “The Freelancer’s Guide to Tax Deductions.”
Table of Contents
- 10 Wild Tax Deductions
- Legit Deduction or Wishful Thinking? Let’s Find Out!
- Itemized Deduction vs. Standard Deduction
10 Wild Tax Deductions
- Swimming Pool
A swimming pool can, in some cases, qualify for a tax deduction. One taxpayer successfully deducted his home pool as a medical expense after his doctor prescribed swimming to help with emphysema. He included the pool, along with the chemicals, heating, cleaning, and upkeep, under necessary medical costs. To justify the claim, he proved that his family rarely used it and that it was installed for medical reasons. - Gender Reassignment Surgery
This can be a complex area, but gender reassignment surgery and hormone therapy may be deductible as medical expenses if deemed medically necessary. One individual, diagnosed with gender identity disorder, attempted to deduct nearly $22,000 for their transition, including hormone therapy, surgery, and breast augmentation. The tax court allowed $14,500 for the medically necessary surgery and hormone therapy but denied the breast augmentation as cosmetic. The key factor is proving medical necessity rather than personal preference. - Cosmetic surgery
In a surprising court ruling, Chesty Love’s breast implants were classified as a legitimate business expense. She argued they were essential “stage props” for her job, and the court agreed, treating them as part of her work attire. This case highlights the often blurry line between personal and business expenses, especially in the entertainment industry. - Body Oil
A bodybuilder convinced the IRS that gallons of body oil were essential for competitions. The IRS agreed, allowing the deduction. His vitamin supplements, however, weren’t so lucky. Looks like even the IRS has its limits. - Landscaping for Home Offices
Landscaping your home office? It may be deductible, but there’s a catch. Your house must be your primary office, and your lawn must be relevant to your business. One sole proprietor pulled it off because he regularly met clients at his home office. - Clarinet lessons
Here’s a weird one: clarinet lessons as a medical expense. In 1962, a parent successfully deducted the cost after an orthodontist claimed that playing the clarinet could help correct their child’s overbite due to the positioning of the instrument in the mouth. - Hawaii’s Tree Tax Incentive
Hawaii offers a tax deduction of up to $3,000 every three years for maintaining exceptional trees that have cultural significance, rarity, or outstanding beauty. - A ‘Playmate’ Event
A nightclub promotions firm owner decided that a regular party wasn’t enough, so he hired scantily clad ‘bunnies’ as décor for a client event. Shockingly, the IRS considered it a legitimate business expense. - Baby Expenses
An Arizona businesswoman tried to write off $26,000 in baby expenses, arguing that her child was part of her company’s advertising. The IRS allowed deductions for photography and a stroller, but denied a substantial percentage of her claim for diapers, childcare, and other necessities. - Whaling boat repairs
While whaling is mostly illegal in the U.S., certain Native American tribes are permitted to hunt. If you own a whaling boat as part of tribal activities, you can deduct up to $10,000 annually for repairs.
Legit Deduction or Wishful Thinking? Let’s Find Out!
Now that you’ve seen some of the most surprising tax deductions that actually got approved, it’s time to test your own deduction savvy. Below are a few expenses. For each, one scenario is deductible, and the other isn’t. Can you determine which is which?
Cat Food
Scenario 1: Junkyard owner buys food for rat-patrolling felines
Scenario 2: Snack for a pet cat
Guard Dog
Scenario 1: Business guard dog expenses
Scenario 2: Pet dog expenses
Tutors
Scenario 1: Specialized tutor for a child with a diagnosed learning disability, as recommended by their doctor
Scenario 2: Reading tutor for general academic improvement
African Safari
Scenario 1: Dairy business owners on a wild animal-focused trip
Scenario 2: Family vacation
Private Airplane
Scenario 1: Condo owners flying themselves to check on their rental property
Scenario 2: Vegas private jet ride
Personal Trainer
Scenario 1: Trainer for a professional athlete
Scenario 2: Gym-goer getting ready for summer
Clown Costumes
Scenario 1: Professional clown costume
Scenario 2: Halloween costume
Sun Protection
Scenario 1: Sunscreen for carpenters/gardeners
Scenario 2: Sunscreen for beach trip
Absolutely right! Scenario 1 is deductible, but Scenario 2 isn’t. Many of these cases are based on real stories, proving that the same expense can be approved or denied depending on the context and whether it meets the IRS rule of ‘ordinary and necessary.’ “Ordinary” means it’s common in your line of work, and “necessary” means it’s helpful and appropriate for your business—not just something you want.
Tax deductions come with rules. For example, guard dog expenses are only deductible for the time the dog is actually working, and medical deductions are subject to limitations like the 7.5% AGI rule. Because tax laws are complex, it’s always best to consult a professional when in doubt.
Itemized Deduction vs. Standard Deduction
These unusual (and sometimes surprisingly successful) deductions highlight the importance of understanding the rules and keeping meticulous records. Navigating the tax code can be tricky, and knowing what qualifies as a legitimate deduction is crucial for any taxpayer.
This is especially crucial when deciding whether to itemize or take the standard deduction. The TCJA changed the tax landscape, making the standard deduction the better option for most taxpayers. But if you have significant deductible expenses, itemizing can still work in your favor. The good news? The old deduction limit is gone, so you can claim the full amount if eligible. That said, with fewer people itemizing, the IRS is paying closer attention to those who do. If you’re planning to itemize, make sure your records are solid.
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