Over the years, taxpayers have come up with numerous creative ideas to try to lower their tax bills. Today, we are discussing three of the tax deductions that did not work out as planned.
Pizza Tax Deduction
One woman in Washington DC decided to hire her kids to work for her consulting and staffing business. Instead, of paying her kids with cash they were paid with pizza. The woman tried to write off the amounts she spent on the pizza as employee wages. However, she was easily shut down when her scenario was viewed as a form of discipline by tax officials.
Wrecked Rental Car Deduction
A rental car agent wrecked one of the cars one day and was held responsible for fixing the damages. He decided to deduct the damages as a casualty loss but was denied since he was not the owner of the car.
Good Night’s Sleep Deduction
One woman ran a tax preparation business from her home. She was constantly harassed by customers who needed their taxes filed and needed to escape it to get a good night sleep. She decided to book a hotel and deduct the expenses as a business expenses. Unfortunately, for her getting a good night’s sleep does not qualify as a business expense.
Lesson Learned
If you do not see something specifically listed on the IRS’s website, you cannot deduct it. You will not get away with it; instead, all you will have done is wasted money and receive a “nice try” from Uncle Sam.
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