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Bankrate's 2009 Tax Guide
Tips & tools
A tax tip a day plus an array of tax tools, terms and training will help you through filing and beyond.
 
Creative taxpayers push the envelope
9 wackiest tax deductions


Did you hear the one about the instant "nephew"? The $35,000 in dance lessons? The new definition of office paperwork?

That's right, it's time for the fourth installment of Bankrate's "wackiest tax deductions," our homage to the endlessly creative ways some taxpayers dream up to try to limbo under the tax code.

In our first installment, taxpayers tried to write off everything from sperm donations to an arsonist's fee. Our second installment found clever filers trying to deduct a "love shack," doggie day care and a pimped-out Amish buggy. Round three featured otherwise law-abiding Americans trying to write off a $50,000 wedding as a business expense and claim everyone in New York City as a dependent!

This year's best cocktail stories -- culled from certified public accountants nationwide, some of whom requested to remain nameless -- naturally comes with a disclaimer: Do not try this at home. Or in the home office, for that matter.

As audacious as these stories might be, rest assured that the Internal Revenue Service is not amused when taxpayers fail to file, misfile, underreport income or otherwise attempt to avoid taxes.

Ready for some laughs? Behold Bankrate's wackiest tax write-offs, 2009 edition.

Creative accounting
Here's our annual homage to taxpayers who try to limbo under the tax code.
 
9 craziest write-offs
1. Paper-thin home office deduction
2. Hell hath no fury ...
3. At least it wasn't 'Travel & Entertainment'
4. Bubble bath credit
5. Beautify your return
6. Unmarried, filing weirdly
7. Dancing with the IRS
8. Of guard cats and canine contractors
9. Costly adoption

1. Paper-thin home office deduction
CPAs sometimes feel they've opened a Pandora's box when they introduce newly self-employed clients to the wonderland of home office deductions: Give 'em an inch and ... well, you wind up like one Arizona accountant whose client exhibited an unusual amount of tax swagger.

The client asked for a home office deduction for the toilet paper he bought for his house. No word on the nature of his business.

2. Hell hath no fury ...
Walt Hatter, CPA at Hatter & Associates in Fort Worth, has seen some generous Texans in his day, but none compare to the woman who literally gave it all away.

The client, whose income was in the $40,000 range, brought in noncash charitable receipts from donations made to various charities. The donation total came to roughly the same dollar amount as her income. 

Hatter was about to nominate her for sainthood -- until he heard the rest of the story.

"She had gotten a divorce; her husband had cheated on her and just never came back," Hatter says. "He called her up and said he would send a moving van to divide their assets. So, she loaded up everything he would want -- two or three sets of golf clubs and all the furniture, including some of his family antiques -- and took it all to Goodwill. She even had photos of all the stuff!"

-- Posted: March 25, 2009
 
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