29 February 2008 One Comment Print This Post  Email This Post

One of my favorite factors of owning a home business is the fact that I can write off a lot of things: a percentage of my rent, computer equipment, even my photography hobby. I’m always on the hunt for new deductions, though — while I understand the need for taxes, I don’t intend to pay anymore than I really have to. There are plenty of common deductions that people know about: child care, college tuition, etc. But every once in a while, I run across something that seems to have been kept quite.

The cost of lotto tickets, for instance, is tax deductible, as is any other losses you incur gambling. The condition is that you’ve actually had to win something. While you can’t sit down and throw money away at the poker table and expect to write all of it off, you can often erase any tax obligation you have on your winnings by deducting your losses. While I’m not a big fan of most gambling — I agree with Robert Heinlein’s assessment that the typical lotto is a tax on people who can’t do math — I know plenty of people enjoy it. If you’re going to gamble, I think you should make the most of it and write off your losses.

Another odd little deduction is available to American expatriates: if you spend 360 out of 365 days living abroad, you can get some major deductions. I don’t recommend attempting to claim this list of deductions without a little professional help (I almost went cross-eyed trying to read through all of the relevant IRS documents), but they add up pretty fast. Deductions include any foreign income tax you pay and students on scholarship have additional opportunities to claim deductions.

Then there are all of the odd little deductions you can pick up depending on your business:

• As an entertainer, you can deduct clothing and personal hygiene expenses (including body-waxing!).
• As a volunteer, you can deduct child care expenses incurred while you were out do-gooding.
• As an exotic dancer, you can deduct breast implants — thanks to a stripper who was willing to take the IRS to court over the matter.
• As an illegal drug dealer, you can still deduct legitimate business expenses, such as baggies for your merchandise.

As April approaches, it’s rapidly becoming a matter of putting on your thinking cap and seeing what you can deduct. When trying to bring down your tax obligation, remember that while there are hundreds of opportunities for deductions, the nice folks at the IRS will be looking over your claimed deductions and may call to ask your reasoning for a particular claim. It may ruin our fun, but it’s best to be realistic about tax deductions.

Thumbnail image Cheryl