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Whether it's depreciation for surgical implants or cat food or bariatric surgery, it's often very difficult to predict whether or not a tax deduction will be allowed.
ortunately, we can scour the rulings to find a few deductions that seem reasonable but are certainly not allowed.
If you wear a uniform for work and are required to purchase it yourself, you can deduct it as an unreimbursed employee expense on Schedule A of your Form 1040. The exceptions to this rule are if your uniform is not suitable for everyday use and it is not a military uniform, if you are on full-time active duty. Where you run into problems is when people start claiming underwear, hats, shoes, and undershirts. If you can wear it every day, as is the case with undergarments, it is not a legitimate deduction.
Not all donations are considered charitable donations. If you participated in a donation program over the holidays where you gave items directly to families, that's not a donation you can claim on your taxes because the families, despite their need, are not 501(c)(3) organizations. If you made a sperm or egg donation, those are not considered charitable donations either. In fact, if you were paid, as is often the case with egg donation, that's income you need to declare for tax purposes.
Education is one of the most well reimbursed sectors in the tax code, with a litany of deductions and credits for education expenses. The problem is that not all educational institutions are created equal and classes from the Church of Scientology aren't the same as classes at Stanford University. To be safe, make sure the classes are at an accredited institution and meet all the requirements of the deduction or credit you will claim.
Most of the ridiculous deductions involve claimed expenses. While this won't apply for your typical taxpayer, it does teach one important lesson – if the deduction doesn't sound right, it's probably not legitimate. Claiming a fish tank when you're a stock broker, gifts when you're a public defender, and nail polish for a tax preparer all sound fishy!
This guest post is from Jim at Bargaineering.