Funny And Unusual Tax Deductions For 2022
Andrew Dehan5-minute read
December 16, 2021
It’s tax season again. Whether you’ve gotten all your paperwork or are just getting started, it’s a good idea to review any tax-deductible items you qualify for. After all, you want to pay as little in taxes as possible, right?
Sure, there’s your usual deductions such as contributions to your IRA and 401(k), first-time home buyer tax deductions, charitable contributions and medical expenses, but there are a few out there that you may not have even heard of. In fact, you might even call some of them downright strange.
Let’s explore some of the more noteworthy items that people have been able to deduct successfully.
Is A Tax Deduction The Same As A Tax Credit?
Although similar, tax credits are not the same as tax deductions. A tax credit reduces the actual amount you’ll pay on your taxes, calculated dollar for dollar. Let’s say you’re trying to avoid capital gains tax – taxes from the profits on the sale of stocks, bonds, real estate, property and precious metals. So if you owe an extra $5,000 in taxes and qualify for a $4,500 tax credit, then you’ll only need to pay $500.
In some cases, if your tax credit is higher than the amount you owe in taxes, you could see a refund. However, most tax credits don’t qualify.
On the other hand, a deduction reduces your liability since it lowers your income tax. In other words, it’ll help you pay fewer taxes since your taxable income will go down. You’ll subtract the tax deduction from your income, resulting in a lower tax bill.
Unusual Tax Deductions For 2022
Here’s a list of unusual tax deductions you can take. Do your own research or consult a tax professional to see if any of these situations can apply to you.
- Breast implants: An exotic dancer was able to deduct her breast implants as a business expense successfully back in 1994. The tax court judge ruled that they’re a stage prop, therefore it’s a legitimate work expense.
- Swimming pools: Pools for recreational use don’t coun However, it can count if you have a medical condition that could benefit from an exercise regimen in a swimming pool. You might need to provide proof such as documentation from your doctor to receive tax breaks.
- Cat food: Put this on the list of another strange business tax deduction. In the past, a junkyard owner purchased cat food to attract stray cats in the area so they could deter mice and rats from congregating at his establishment – and claimed the cost of cat food as a business expense.
- Nicotine patches: If you participate in smoking cessation programs, use stop-smoking aids or nicotine patches, you may qualify for deductions.
- Weight-loss items: If your doctor approves these items and provides ample proof that without these items, your life could be in danger, then you can deduct weight-loss expenses in your taxes. These could include items or services that help you improve your heart rate, reduce your cholesterol or lose weight.
- Body oil: According to the Tax Court, you can deduct the cost of the oil as a business expense. This deduction started when a bodybuilder used it during his tournaments to make his muscles shine.
What Are Some Other Tax Deductions I Can Claim?
Here are some common tax deductions (though this isn’t a comprehensive list):
- Charitable contributions: If you decide to itemize and provide ample proof of your charitable contributions (including the fair market value of items) to qualifying organizations, you can deduct up to 60% of your adjusted gross income.
- Work-related education expenses: Again, you’ll need to itemize, but you may be able to deduct any education expenses such as books, tuition, lab fees, supplies and limited travel costs. These expenses need to directly relate to ones that your employer requires to maintain your position or salary and improve your job skills.
- Medical and dental expenses: You can use the medical and dental expenses deduction for you and your family if these expenses are more than 10% of your AGI.
- Personal casualty losses: If the president declares a disaster in an area and you were one of its victims, you can qualify for deductions such as loss of household items, vehicles and even the loss of your home where insurance hasn’t already
- Home office expenses: If you have a legitimate business entity and your home office qualifies, you can itemize to qualify for deductible business expenses.
- Home mortgage points: Mortgage points are prepaid interest on your home loan and can be deductible if you itemize. You can also deduct property taxes and mortgage insurance as long as you itemize.
Which Charitable Contributions Are Tax-Deductible?
A charitable contribution is a donation or gift given to a qualified organization without reciprocity. The contributions can go toward religious and missionary organizations; museums; nonprofit foundations and educational companies; and more. For the tax-deductible donations to qualify, they must be:
- In cash
- Given to a qualified organization
- Given during the calendar year
What Exactly Does The IRS Let You Deduct As Moving Expenses?
As of 2018, the majority of people did not qualify for deductible moving expenses. According to the Tax Cuts and Jobs Act Tax of 2017, the only eligible people are active-duty members of the armed forces. However, if you are authorized, your deductible expenses typically include:
- Storage unit
- Rental trucks
- Parking costs
Should I Itemize Or Take The Standard Deduction?
When figuring out whether to itemize deductions for your 2020 taxes, it really depends on which could save you more money. If your itemized deductions are more than your standard deductions, then itemizing makes sense.
Keep in mind that itemizing can take more time since as a taxpayer, you’ll need to fill out more forms, plus provide proof that you’re owed those deductions. If your standard deduction is more than your itemized deductions and you don’t want to spend the extra time, you should take the standard deduction.
If you’re unsure which option is better, consult a tax professional or use reputable tax software to see which will help you pay less in taxes. Remember, being organized with your taxes is one of the many ways to be better with your personal finances, so it can be worth it to take some extra time to compare filing methods.
The Bottom Line
A funny or unusual tax deduction can be a pleasant surprise, by virtue of it being difficult to identify. Tax rules are complex and can change depending on the year; however, each deduction has specified terms which you must meet to qualify.
Everyone may not be eligible for all these deductibles, so it’s essential to do your research, know what the Tax Court will permit as a legitimate cost and business expense and consider contacting an expert for help.
Check out our Learning Center for more information about tax deductions.
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