Tax deductions can save you money, so it pays to know what Uncle Sam will allow you to write off on your tax return. Some deductions are so unusual that few taxpayers qualify or few people know about them. If you happen to be lucky enough to meet the criteria for an uncommon deduction, count your blessings and be thankful for the tax write-off.
Charitable Contributions Deduction
If you hire a baby sitter while you do volunteer work, you can deduct the money you pay your babysitter as a charitable contribution. Although the money isn’t going directly to a charity, baby-sitter fees allow you to do your part for a charitable cause. Your volunteer work must be for a qualified organization. The IRS also allows you to deduct baby-sitting expenses you pay so that you can attend a charitable event. Another little heard of deduction, but a legitimate charitable contribution all the same, is the deduction for whaling expenses. A taxpayer who is recognized by the Alaska Eskimo Whaling Commission as a whaling captain in charge of sanctioned whale-hunting activities qualifies to claim the deduction. This may seem like a really crazy deduction, but hey, if you qualify, you can deduct up to $10,000 of whaling expenses a year.
Moving Expenses Deduction
Another tax break Uncle Sam gives you is paying to get your pet to your new home. The IRS considers a pet a personal belonging. If you have to relocate to another area because you took a new job, you can deduct the cost of transporting your dog, cat, fish, hamster or any other pet. The IRS doesn’t discriminate. Your pet can be of any species, and it still qualifies as a personal possession. Save the bill, receipt or cancelled check as proof of the expense. Deduct the expense in the year in which you paid it.
Home Office Deduction
If your home office is the principal location where you do business, you may qualify to take the home office deduction. According to the IRS, you must use that portion of your home exclusively to conduct your business. How much of a deduction you can take depends on how many square feet of your home you use in your business. Besides deducting the applicable portion of expenses such as utility bills and property taxes, you can deduct a share of the cost for general repairs and maintenance of the space you use for business. The IRS may even allow you to deduct a portion of the costs of lawn care and landscaping if the property is part of the home where you regularly carry out your business. In fact, the Tax Court ruled in favor of one businessman who claimed a portion of his driveway repairs as a home office expense.
Unusual Medical Expenses
In most cases, the IRS will allow a medical expense deduction for any uncommon medical expenses as long as your doctor states in writing that the expense was medically necessary. The IRS also approves deductions for medical treatments provided by Christian Science practitioners and Native American medicine men. Individuals with gender identity disorder may now deduct medical expenses for hormonal treatments and gender reassignment surgery. The decision follows a long court battle in which the federal Tax Court ruled that gender identity disorder is a medical condition that qualifies some of the related medical expenses as a deduction. You can deduct only the amount of unreimbursed medical expenses that exceed 7.5 percent of your adjusted gross income. Beginning January 1, 2013, you may deduct the amount of your total medical expenses for the year that exceed 10 percent of your adjusted gross income.
- IRS.gov: Publication 526
- WorldWideWeb Tax: Can I Take a Tax Write Off for Itemized Deductions on My Tax Return?
- Time Moneyland: Sex Change Surgery Is Now Tax Deductible
- Kiplinger: Extraordinary Tax Deductions
- IRS.gov: Publication 521
- TurboTax: The Home Office Deduction
- IRS.gov: Medical and Dental Expenses
Amber Keefer has more than 25 years of experience working in the fields of human services and health care administration. Writing professionally since 1997, she has written articles covering business and finance, health, fitness, parenting and senior living issues for both print and online publications. Keefer holds a B.A. from Bloomsburg University of Pennsylvania and an M.B.A. in health care management from Baker College.