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February 22, 2016 at 09:07 AM
Imagine that you have a client that works as a professional clown. In this imaginary scenario, your client would want to know that his clown uniform, from the oversized shoes to the red nose, is deductible from his tax return. It turns out that these items are not usable anywhere else and, therefore, are officially labeled tax deductible.
(In case you’re wondering if that law also applies to horrible bridesmaid dresses: No, dear bridesmaid, you may not be able to wear that green satin nightmare anywhere else, but you won’t receive a tax perk for your sacrifice.)
We combed the Internet to find the weirdest tax laws out there, from odd deductions to strangely specific taxations. Here are some of the findings.
In the United States:
1. The professional bodybuilder tax deduction
According to Investopedia, the Internal Revenue Service (IRS) will allow taxpayers in certain professions to deduct expenses related to their physical appearance. The article, which you can read here, says that the tax courts have ruled that bodybuilders can deduct the cost of body oils and other products that they use to enhance the appearance of their skin.
They can’t deduct every work-related expense, however. Another article in The Fiscal Times says that a professional bodybuilder can’t deduct the “wheatgrass shots and buffalo meat he eats to tone his form.”
2. The starving artist tax deduction
LearnVe$t, a financial planning company that sells software, notes that performing artists can get a deduction for expenses incurred under certain circumstances. These circumstances include: “… [having] at least two employers, and receiving at least $200 in income from each; [incurring] job-related expenses that are more than 10 percent of income from performing artist jobs; and [having] an adjusted gross income that does not exceed $16,000. If they meet those requirements, they can deduct art-related expenses.”
3. The “hosting an exchange student” tax credit
Investopedia says that if you are hosting a student from a foreign country, then you may be eligible for a monthly tax credit of up to $50. Several conditions must be met in order to qualify for this credit. First, the taxpayer must have an official agreement with the organization that is sponsoring the exchange program, and that organization’s reason for existence must be either solely or primarily to provide educational opportunities and experiences for its students, the article says. The exchange student must also be a full-time high school or secondary school student and cannot be a relative or family member of the host.
4. The “jock tax”
TurboTax, the tax preparation software company, recounts that back in 1991, the state of California imposed a new tax after the Chicago Bulls beat the L.A. Lakers in the championship finals. The tax consists of taxing sports celebrities, performers and other entertainers who generate money, and was subjected as California State Income Tax.
Since it was originally enacted in California, additional states have adopted the “jock tax.”
5. A tax on litigation
According to efile.com, a tax filing software company, in Tennessee, there is a tax on all litigation. The amount varies case-by-case but it can be as low as $1 for a parking violation case. The tax is designed to discourage frivolous lawsuits.
6. People over 100 years old are tax-exempt in this state
Are you or your loved one over 100 years old? Then New Mexico might be looking really good right about now: Centenarians are exempt from New Mexico state income tax, according to efile.com, a tax filing software company. The one caveat is that the person can’t be classified as a dependent.
