What Are Some Crazy Tax Deductions That Actually Worked?

When it comes to taxes, creativity can sometimes pay off—literally! While most taxpayers stick to standard deductions, some individuals and businesses have successfully claimed unusual expenses as tax deductions. From pet food to pool maintenance, there’s no shortage of wild stories about deductions that the IRS has approved. In this article, we’ll explore some of the craziest tax deductions that have actually worked, why they were approved, and what lessons you can take away for your own tax strategy.

1. Pet Food for Business Use

A farmer successfully deducted the cost of cat food as a business expense. Why? The cats were not just pets; they were hired help! They kept mice and pests away from the farmer’s grain storage. Since the cats served a clear business purpose, the IRS approved the deduction.

Takeaway:
If an expense is necessary and directly related to your business operations, it might be deductible—even if it’s a little unconventional.

2. A Swimming Pool for Medical Reasons

One taxpayer was able to deduct the cost of installing and maintaining a swimming pool. The reason? Their doctor had prescribed swimming as a form of physical therapy to treat a medical condition. The IRS agreed that this was a valid medical expense, as long as the taxpayer had proper documentation.

Takeaway:
Medical deductions can be broader than you think. If you have a health-related expense, ensure it’s backed by a doctor’s recommendation and proper records.

3. Guard Dog Expenses

A junkyard owner successfully deducted the costs of feeding and caring for their guard dog. The dog provided security for the business, which qualified the related expenses as a business deduction.

Takeaway:
If you use an animal strictly for business purposes, you may be able to deduct related expenses. Just be sure the animal’s role is well-documented.

4. Bodybuilding Oil

A professional bodybuilder deducted the cost of body oil used in competitions. The oil was deemed essential for showcasing muscle definition, a critical part of the sport. The IRS allowed the deduction because it directly related to the bodybuilder’s profession.

Takeaway:
Industry-specific expenses, no matter how niche, may qualify as deductions if they’re essential to earning income.

5. Clarinet Lessons for Medical Therapy

One surprising case involved clarinet lessons. A parent claimed the lessons as a medical deduction after their child’s orthodontist recommended the instrument to help correct an overbite. The IRS approved the deduction because it was deemed a valid medical treatment.

Takeaway:
Even seemingly unconventional medical treatments can qualify for deductions if they’re recommended by a healthcare professional.

6. A Private Airplane for Business Travel

A business owner who frequently needed to travel to remote locations successfully deducted the cost of a private airplane. The argument was that commercial flights weren’t practical for their unique business needs, and the IRS agreed.

Takeaway:
If a major expense is justified as essential for your business operations, it could be deductible—just be prepared to show proof.

7. Sex Reassignment Surgery

In one landmark case, the cost of gender confirmation surgery was allowed as a deductible medical expense. The taxpayer successfully argued that the procedure was medically necessary to treat gender dysphoria, and the IRS approved the deduction.

Takeaway:
The IRS can allow deductions for medically necessary treatments, even if they fall outside traditional norms.

8. A Whaling Captain’s Boat Repairs

A whaling captain claimed deductions for boat repairs and equipment under a special provision that supports Native Alaskan whaling practices. The IRS approved the deductions due to the cultural and subsistence nature of the expense.

Takeaway:
There are niche tax provisions for specific industries, professions, and cultural practices. A knowledgeable CPA can help you identify them.

9. A “Business Trip” to Bermuda

One taxpayer successfully deducted the costs of attending a business conference in Bermuda. This was allowed because Bermuda was one of the locations where the IRS explicitly permits deductions for business travel.

Takeaway:
Certain locations and industries have tax-friendly rules. Understanding them can lead to savings while staying compliant with the law.

10. Moving a Pet

When a taxpayer moved for a job and brought their pet along, they deducted the cost of transporting their furry friend. The IRS allowed the deduction because it was part of a qualified job-related move.

Takeaway:
If you’re relocating for work, don’t forget to explore deductions for associated expenses, including those for pets.

11. Wedding Reception as a Business Expense

One couple managed to deduct the cost of their wedding reception because it doubled as a marketing event for their business. They invited clients, displayed products, and conducted business networking during the celebration.

Takeaway:
If a personal event has a clear business purpose, it might qualify for deductions. Documentation is key.

12. Tax Write-Offs for Gambling Losses

One professional gambler deducted significant losses on their taxes, as these were considered part of the “cost of doing business.” The IRS approved the deduction because the taxpayer could prove gambling was their primary occupation.

Takeaway:
For hobbyists, this deduction doesn’t apply, but if you can prove an activity is your profession, you may be eligible for unique tax benefits.

How We Can Help

As you can see, tax deductions aren’t limited to the ordinary. With the right guidance, you can uncover legitimate ways to reduce your tax burden—even with unconventional expenses. At SD Bookkeeping by Paul Anderson, we specialize in finding creative and compliant solutions tailored to your unique financial situation. Whether you’re a small business owner, a medical professional, or a busy entrepreneur, our expertise can help you maximize your deductions while staying in the IRS’s good graces.

Contact us today for a consultation and let San Diego’s top-ranked CPA handle the complexities of your bookkeeping, accounting, and tax needs.