Mellody Hobson on the Craziest Tax Write-Offs

4798It's hard to think there's anything funny about taxes when you're under a mountain of paperwork, but I do have a bit of comic relief for you today! I did some research about the craziest tax-write offs the IRS has allowed--and some ridiculous things people have tried and failed to slip by the IRS--and you're not going to believe some of the things I dug up!
You'd be amazed about what people try to write off concerning their pets, and it's no wonder why--they're expensive! According to the ASPCA, dogs and cats both cost over $1,000 a year. One woman claimed an unusually high amount of medical expenses for a dependent, but she didn't have a spouse or any children. Turns out the "dependent" was her dog. Her accountant set her straight that if it's covered in fur, you can't claim it as a dependent. In general, pet expenses are not deductable, but there are a couple of surprising exceptions.

For instance, you can deduct expenses related to a foster animal if the goods or services are SOLELY for the foster pet AND if the organization is a registered non-profit.  That means it has 501(c)(3) tax status. Also, expenses exceeding $250 may require a letter from the organization. In a landmark tax court case, a California woman was able to deduct 90% of the $12,000 in deductions she claimed for the 70 cats she fostered. Seventy cats. But this wasn't your average crazy cat lady--she was working with a legitimate charity.

Another case in which you can deduct dog expenses? If you own your own business and your dog doubles as a security system. But don't push it! You can't deduct expenses for your Chihuahua--If you're going to claim you employ Fido as a guard dog, you need to be a little bit afraid of him yourself--We're talking pit bulls and German Shepherds, not a Labrador who greets you at the door with a squeaky toy. You can't deduct the cost of the dog itself, but related expenses--like food and medical bills--can qualify. The craziest detail? You can depreciate your guard dog over its lifespan as determined by a local breeder. Remember, as with everything tax-related, documentation and receipts are crucial.

Source: Black America Web | Mellody Hobson
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