- Days left

Crazy Tax Deductions: 10 Claims That Didn't Quite Fly

×

Tax deduction traps By Peter Blank, Editor, The Kiplinger Tax Letter

Over the years, taxpayers have concocted a lot of zany arguments to justify tax deductions. We've come up with what we think are the 10 most creative ones that the tax courts decided didn't quite pass muster.

As secret agent Maxwell Smart would say, "Missed it by that much!"



Increase your money and finance knowledge from home

How much house can I afford

Home buying 101, evaluating one of your most important financial decisions.

View Course »

How Financial Planners go Grocery Shopping

Learn to shop smart and save.

View Course »

TurboTax Articles

What is IRS Form 8824: Like-Kind Exchange

Ordinarily, when you sell something for more than what you paid to get it, you have a capital gain; when you sell it for less than what you paid, you have a capital loss. Both can affect your taxes. But if you immediately buy a similar property to replace the one you sold, the tax code calls that a "like-kind exchange," and it lets you delay some or all of the tax effects. The Internal Revenue Service (IRS) uses Form 8824 for like-kind exchanges.

What are ABLE Accounts? Tax Benefits Explained

Achieving a Better Life Experience (ABLE) accounts allow the families of disabled young people to set aside money for their care in a way that earns special tax benefits. ABLE accounts work much like the so-called 529 accounts that families can use to save money for education; in fact, an ABLE account is really a special kind of 529.

What is IRS Form 8829: Expenses for Business Use of Your Home

One of the many benefits of working at home is that you can deduct legitimate expenses from your taxes. The downside is that since home office tax deductions are so easily abused, the Internal Revenue Service (IRS) tends to scrutinize them more closely than other parts of your tax return. However, if you are able to substantiate your home office deductions, you shouldn't be afraid to claim them. IRS Form 8829 helps you determine what you can and cannot claim.

What is IRS Form 8859: Carryforward of D.C. First-Time Homebuyer Credit

Form 8859 is a tax form that will never be used by the majority of taxpayers. However, if you live in the District of Columbia (D.C.), it could be the key to saving thousands of dollars on your taxes. While many first-time home purchasers in D.C. are entitled to a federal tax credit, Form 8859 calculates the amount of carry-forward credit you can use in future years, not the amount of your initial tax credit.

What is IRS Form 8379: Injured Spouse Allocation

The Internal Revenue Service (IRS) has the power to seize income tax refunds when a taxpayer owes certain debts, such as unpaid taxes or overdue child support. Sometimes, a married couple's joint tax refund will be seized because of a debt for which only one spouse is responsible. When that happens, the other spouse is said to be "injured" and can file Form 8379 to get at least some of the refund.

Add a Comment

*0 / 3000 Character Maximum

98 Comments

Filter by:
scottee

Americans already waste $431 billion per year complying with our tax code, yet the IRS is clearly incapable of doing its part by providing basic services to those taxpayers – such as picking up the phone. What does the IRS demand as a solution to its failures? More of your money. That’s right – the IRS wants an increase to the $11.8 billion they have already been given.

We don’t need to reform the IRS; we need to eliminate it.

That is why I am championing H.R. 25, the FairTax, which would dismantle the IRS and replace our current tax code with a 23% consumption tax at the final point of purchase for new goods and services. Not only would the FairTax do away with the headache of income tax compliance, it would also replace all other federal taxes. Congress wouldn’t need to continue debating whether or not Americans should get another two-month “holiday” from the payroll tax – the FairTax would permanently eliminate it. We wouldn’t have to keep fighting over which industries should continue to be subsidized with federal dollars in this budget-slashing era; the FairTax would eliminate them all and level the playing field for everyone.

January 21 2012 at 8:29 AM Report abuse rate up rate down Reply
belldn3

Now that's a man who loves his porn. I have spent money on it, but not that much. Movies, not ladies of the night.

January 19 2012 at 7:41 PM Report abuse +1 rate up rate down Reply
JIMMY

Well.......prostitutes are cheaper than wives, and complain less.

January 19 2012 at 5:17 PM Report abuse +2 rate up rate down Reply
teltech543

Crap. So much for my "massage therapy" deductions.

January 19 2012 at 5:04 PM Report abuse rate up rate down Reply
amikebec

thats correct, if if you want a job done right, either hire a professional or do it yourself.... :D

January 19 2012 at 5:01 PM Report abuse rate up rate down Reply
HELLRAISER

Prostitutes, good for America, IRS bad.

January 19 2012 at 4:53 PM Report abuse rate up rate down Reply
CraZyDiaMond2020

I LMAO THANKS!!!! STILL LAUGHING, THESE COMMENTS WERE THE BEST!!!!

January 19 2012 at 4:45 PM Report abuse rate up rate down Reply
z06corvette500

A prostitute.The best thing about them?You only have to pay them once not weekly.lol

January 19 2012 at 4:40 PM Report abuse rate up rate down Reply
Lightning F2A

Ahh prostitutes, the perfect woman - she always says yes and you get to see her leave when you're done.

January 19 2012 at 4:22 PM Report abuse +1 rate up rate down Reply
2 replies to Lightning F2A's comment
vanessaem

Your perfect woman is someone you have to pay to every time you have sex? I guess you can't get it any other way...lol.

January 19 2012 at 4:32 PM Report abuse -1 rate up rate down Reply
2 replies to vanessaem's comment
howardfrenkfort

He just prefers to pay as you go instead of the lump sum method.

January 19 2012 at 4:38 PM Report abuse +1 rate up rate down
likecandy7

Every man pays, only b/c every woman expects to be paid.

January 19 2012 at 5:26 PM Report abuse -1 rate up rate down
adstith

Your getting some flak for your Comments..I thought it was really funny. Ya gotta be divorced, I am!! thats why we find it funny

January 19 2012 at 4:41 PM Report abuse rate up rate down Reply
ketavan

http://www.youtube.com/watch?v=jhUkGIsKvn0

January 19 2012 at 4:16 PM Report abuse rate up rate down Reply