April 21, 2024

Finance Advice Agency

Advices To Achieve Your Financial Goal

Unusual Tax Deductions – Hidden Opportunities For Savings

Now that tax season has arrived, it is important to verify the legitimacy of all deductions claimed – though some could seem odd at first glance.

An individual engaging in bodybuilding could deduct the cost of body oil as an acceptable medical expense, and property owners could pay their girlfriend to manage their properties and deduct any wages received as deductions.

Swimming Pools

People commonly associate swimming pools with summer fun, relaxation and exercise – not to mention adding significant value to a home! But did you know they also add an important source of investment potential.

The IRS may be known for being strict when it comes to its tax regulations; however, it has allowed some strange deductions such as when a furniture store owner who hired an arsonist to burn down his business was allowed to deduct his cost as part of his expenses.

An arthritis patient who installed a pool at home could claim it as medical expenses, since the pool helped improve his condition by helping him maintain weight control and participating in an exercise routine prescribed by his physician. Furthermore, having his own pool also saved money on trips to gyms or doctors offices – two costly endeavors.

Nepotism

Nepotism occurs when someone shows favoritism to family or close friends without considering their merit, often seen in companies and government organizations where members of leadership’s families are hired into positions of authority.

Nephews tend to be among the primary beneficiaries of nepotism; however, this practice can extend to other family members and even non-relatives. A related term is “cronyism”, which refers to giving preferential treatment based on friendship instead of merit.

Nepotism may seem like an unacceptable business practice, but there can be exceptions where its use can have advantages. For instance, when one California woman used cat food to attract wild cats and discourage snakes from her scrapyard, she was allowed by the IRS to deduct its cost as an expense.

Below-Ground Pools

People can deduct expenses like swimming pools and hot tubs if they can present the IRS with evidence to back their claims of medical necessity for using them as deductions. Customizing the pool to address specific medical conditions will also help convince the IRS that you qualify.

The Internal Revenue Service generally considers swimming pools capital expenditures that must be depreciated over time, though there are exceptions when they’re used for medical purposes like physical therapy, musculoskeletal conditions and osteoporosis treatment. A swimming pool wouldn’t qualify as tax deductible if its sole purpose were weight loss though as that wouldn’t qualify as a valid reason to install one in your backyard.