Tax season has arrived. It’s crucial to deduct taxes properly unless you have a great accountant to help you do it. But there are things most people don’t know they can deduct. You might be surprised to learn that you can claim your dog or cat’s expenses on your tax return. And that’s not all–here are more surprising tax deductions that might get you a higher return.
1. Pets
Did you know you can write off your pet expenses on your tax returns? There are specific regulations and information that you should be aware of before attempting to do so. According to PawlicyAdvisor, pets are not considered dependents for tax purposes, which means you cannot claim them as such.
However, you may still qualify for different tax deductions for pets, allowing you to write off expenses such as veterinary bills, food, supplies, insurance, and more.
2. Gym Memberships
This news may relieve those struggling with medical care and needing to go to the gym for treatment. It is possible to deduct your gym membership fees from your taxes, but there are specific criteria that you need to meet.
First, a doctor must diagnose you with a specific medical condition, and you should use the gym facility to treat this condition. Additionally, you cannot have belonged to the gym before your diagnosis. Therefore, while you can claim your gym membership as a deduction, you must be in a specific scenario to do so legally.
3. Beer
Back in the early 1980s, a tax court decided that some businesses could deduct the cost of free beer that they gave to their customers. The business owner gave free beer to their customers and then claimed it as an expense. While it’s not a good idea to try and do this yourself, it is an exciting opportunity to keep in mind if you have beer fridges in your office.
4. Bitcoin
Are you interested in cryptocurrency? As with any other investment, if you profit from investing in Bitcoin, you must report it and pay taxes. However, instead of keeping the profit, donating your Bitcoins to a charity allows you to take a deduction on your taxes. This can be a great opportunity to support a cause and reduce your tax burden.
Cryptocurrencies held in your portfolio are not subject to IRS taxes. However, you must report capital gains when selling cryptocurrency for a profit.
5. Cosmetic Surgery
Did you know that in 1994, a court case related to taxes opened up the possibility for adult entertainers to claim breast augmentation surgery as a deductible expense? An exotic dancer requested a tax deduction of $2,088 for her surgery, which the IRS initially declined. However, the tax court allowed the deduction when she appealed the decision.
The court determined that breast augmentation surgery could be considered a valid business expense because it had the potential to increase her earnings by generating larger tips and more profits.
6. Body Oil
Bodybuilders who belong to a professional association can list certain expenses as necessary and ordinary, such as body oil. However, in a particular situation, a court decided that expenses like food and supplements used to achieve the bodybuilder’s physique are not eligible for deduction.
7. Traveling Abroad
If you travel frequently for work, you may be able to deduct your travel expenses around the country and in most of North America. There are limits to what expenses can be itemized. Still, you can include travel expenses to places like the Bahamas, Bermuda, and Costa Rica as long as the purpose is related to your company, such as a meeting with clients.
However, proof of a reasonable business trip is required to claim a deduction for travel outside North and Central America.
8. Trips on Cruise Ships
Did you know that attending a business event on a cruise ship can be tax-deductible? Naturally, there are limitations you need to be aware of. You must have substantial proof that most of the cruise was dedicated to business activities and that you personally participated in them.
If you meet these requirements, you can enjoy a relaxing and productive business trip, though your deduction will be limited to two times the federal per diem rate allowable when you travel (with a maximum of $2,000 per year).
9. Home Improvement
If you want to renovate your home, consider creating an office space that could offer tax deductions. However, bear in mind that the IRS has strict guidelines for what constitutes a home office. To qualify, your home office must be the primary location where you conduct your business and used exclusively for work purposes.
However, two exceptions to the exclusivity rule are allowed: if the space is used as a child care center or as a simultaneous storage area for inventory or product samples. It’s worth taking the time to properly understand the IRS guidelines to ensure that you can maximize your tax deductions and enjoy the benefits of a home office.
10. Landscaping
Are you a self-employed individual or someone who works from home? If so, you can deduct the expenses you incur for improving your home landscape as long as it’s related to your business. For example, if you often meet with clients at your residence, you can claim the cost of landscaping tools as deductible expenses.
11. Hair and Makeup
These expenses are often considered business expenses rather than personal ones if used for branding purposes. So, if you use your hair to promote your brand, you can write off those hair dye expenses. Many people are unaware of this fact and miss out on these valuable deductions.
12. Work Clothing
Certain work attire can be considered for a tax write-off. However, you cannot simply go shopping and write off your purchases. For clothing to qualify as a write-off, it needs to be essential for your business operations and in line with industry standards. This means that a new suit or a nice dress would not count as a tax deduction.
Protective uniforms and costumes may qualify for a write-off, but you cannot deduct the expenses if the attire is suitable for everyday wear.
13. Fitness Trainers
Though athletes are not allowed to deduct the cost of nutritional or dietary supplements to improve their performance, they can deduct the cost of hiring fitness trainers or coaches as a work-related business expense. So, if you’re self-employed and need a coach or fitness trainer for your business, it’s worth discussing this with your accountant.
14. Swimming Pool
Who doesn’t dream of having a swimming pool at home? The good news is that you may be able to deduct the expenses associated with your pool, though not everyone qualifies. If you have a medical condition that requires you to use a pool as part of your routine, then the costs associated with your pool may be tax-deductible.
15. Quitting Smoking
The IRS allows you to deduct expenses related to smoking cessation programs, aids, and patches. This means that quitting smoking not only benefits your health but also your wallet. So, why not take advantage of this opportunity and kick the habit for good?
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