Most people who have experienced a formal education probably have read the Herman Melville classic Moby Dick, the story of mad Captain Ahab, on a revenge quest to find the giant white whale that bit off his leg. If Captain Ahab was financially savvy, he might have realized that if you own a whaling boat, you can deduct up to $10,000 annually for repairs. Of course, nowadays this might be difficult due to the U.S. government’s ban on the practice of whaling, unless you are a Native American.
In one tax deduction case, a doctor prescribed an osteoarthritic patient to swim several times a day as a treatment. The IRS then permitted the patient a deduction for the use of their swimming pool. Don’t get any clever ideas and assume that your swimming pool, still with evidence of last week’s pool party bash, will qualify for a deduction because it surely won’t. Also, if the pool counts as a qualifying medical expense and it increases the value of your property, you have to subtract that amount from the amount you deduct.
Over the years, creative people have proposed many odd deductions to the IRS that they believed could be used as a medical deduction or for business purposes. For example, if you have mobility issues and are unable to leave or maneuver throughout your multi-story home, you could have an elevator installed. You can then deduct this qualifying medical expense, which is the total amount above 7.5% of your adjusted gross income (AGI). As with the swimming pool, if the elevator increases the value of your home, you are required to subtract that amount from the amount you deduct.
Regarding taxes and deductions, contact your local IRS office to determine if you have a qualifying medical expense or professional cost that might be deductible. Professional bodybuilders can itemize the necessary costs of their profession, like body oil. Think creatively and don’t be afraid to ask. Former President of McGraw Hill Education, Henry Hirschberg, once said, “If you don’t ask, you don’t get.” Truer words were never spoken.
If you are a small business owner, as your employees are thinking creatively about how to take their deductions, you can think outside the box on ways to show your employees some appreciation this tax season. Consider these suggestions:
Give Them a Small Gift
Gifts are powerful motivators, and they make people feel good and appreciated. You don’t have to spend a ton of money, maybe a gift card for employees’ next oil change, or a $50 VISA gift card they can spend on anything they want.
Host a Themed Tax Season Lunch
Who doesn’t like a buffet lunch, dressing up, and chatting with friends and co-workers in the middle of the day? Let your employees know how much you care with an annual tax season-themed lunch to ease some of the stress involved with managing tax bills.
Thank Your employees! Let Them Know How Important They Are
Just saying, “Thank you!” or “You are doing such a great job!” can brighten someone’s week and make them feel like all that hard work is being noticed. And for business owners, especially smaller ones, it doesn’t cost anything. You can even leave a personalized note on their desk or via email.
Have Surprise Birthday Parties
Find out what makes each of your employees unique and do something special on their birthday, such as having a cornhole contest or a competition to see who can solve the crossword puzzle the fastest. Be creative, make it interesting and enjoyable, and let your employees know that you are interested in them as people and not just labor during the nine-to-five window.
Contact Your Financial Professional
Whether you are curious about the possibility of a specific deduction, the impact of your decisions on your tax strategy, or even creating a budget for your small business to provide something special for your employees, a financial professional might be able to help you out. Consider contacting your financial professional with all of your financial needs. They may be able to help you modify your strategy and create new manageable goals to work towards.
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
Sources:
10 Weird Tax Breaks That the IRS Allows (aarp.org)
Crazy Tax Deductions Allowed by the IRS (businessnewsdaily.com)
Deducting Medical Expenses for a Major Illness or Injury - TurboTax Tax Tips & Videos (intuit.com)
This article was prepared by LPL Marketing Solutions
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