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10 Wackiest Tax Laws and Deductions

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Get ready to nerd-out on our top 10 wacky tax laws. And who knows? Maybe they'll help you save some cash on your taxes this year.

Let out your inner tax nerd! These 10 wacky tax laws are fun anytime of the year. Plus, you might even get a few hot tips that you can take to the bank come tax-time.

Let out your inner tax nerd! These 10 wacky tax laws are fun anytime of the year. You might even get a few hot tips that you can take to the bank come tax-time.

With your W-2 in hand and a year’s worth of receipts, you might think you’ve got everything you need to get your taxes done. But do you know the ten wackiest tax gems hidden in 3.8 million words of the federal tax code? Of course not, no normal person has the time (or inclination) to read those. Find out the 10 fun tax facts that will lighten your tax prep and—who knows—may even let you in on a new deduction this year.

Foolish businessWhy you shouldn’t wear your red nose to the opera

Ever wonder why a clown’s costume is a deductible expense, but your business khakis aren’t? It boils down to multi-use: if you can wear your work clothes outside your business setting, they’re not deductible.

 

Drug dealSell bath salts the legal way

Ever since Al Capone was busted for tax evasion, criminals must think extra carefully about paying their taxes. In 21 states, there’s even a tax on illegal drugs. Drug dealers are required to contribute their tax payments anonymously, and in exchange they get a stamp. If they’re caught and don’t have this stamp, they’re in double trouble. On the other hand, dealers can deduct the cost of their product as a business expense (sorry, peripheral expenses like baggies, burner phones and security detail don’t count).

Scared_whaleCall me Ishmael, CPA

According to a 2004 law, whaling captains can claim up to $10,000 in tax deductions for ship repairs, equipment purchases and whaling expenses. But before you try claiming this deduction or go out and buy a boat, be warned: whaling is banned in the United States, with exceptions for Native American cultures.

House on fireIs this my beautiful house? Also, why is my beautiful house on fire?

Having your house burn down isn’t all bad, at least, not in one highly specific case. If you donate your land and house to your local fire department for them to burn in a training exercise, you can deduct the loss on your taxes. It has to be true charity though: if you only donate the house and keep the land, you’ll be left with a charred loss and no deduction.

money grows on treesTree-mendous savings

You’ve heard of historic building registries, but what about tree registries? Hawaii rewards its residents for taking care of trees judged to be “exceptional” by a certified arborist. If your tree has “historic or cultural value or that, by reason of its age, rarity, location, size, esthetic quality, or endemic status, is deemed worthy of preservation”, you can deduct up to $3,000 for care and maintenance expenses.

Arrow taxPaging Katniss Everdeen. Katniss Everdeen to the white courtesy phone

There’s been a lot of talk lately about gun control laws, but did you know there’s an excise tax on arrows? Arrows that are more than 18 inches long, or that are made for bows with a certain draw, are taxed 42 cents per shaft. This money goes towards wildlife restoration, which is great news for hunters and other nature lovers, and bad news for teenage Hunger Games participants.

Couch surferStart charging those couch surfers

If you rent out a space for fewer than 15 days in one calendar year, all that rental income is completely tax free. This means if you’re planning on going on a two-week vacation, feel free to rent out your house and put more of that money towards travel and souvenir expenses. Or just collect a little extra cash from your couch-surfing friends (and it couldn’t hurt to make it clear that their checkout day should be before the 15-day time limit).

bambiBambi is so moving to North Carolina

South Carolina offers a $50 tax credit to butchers for each deer carcass they dress and then donate to charity. The venison donor must be a licensed packer, butcher, or processing plant, and the donation has to be pre-arranged (that is, it can’t just be discarded venison). Feeding the needy, managing deer populations, and gaining a tax credit—it’s a win-win-win!

kobe-bryant-sadWeep for Kobe Bryant

The life of a sports hero isn’t all perks. Professional athletes have to pay state income taxes on the money they make in the states where they play. California was the first state to impose the so-called “Jock Tax”, but roughly half the states have followed suit since. About 2% of whatever the athletes earn on the games they play in the local area goes back into those local communities.

100th_BirthdayYou don’t look a day over 95

And a very happy 100th birthday to you! If you’re 100 or older and live in New Mexico, you are exempt from paying state income taxes (as long as no one can claim you as a dependent, that is). Who says tax law can’t be a thoughtful birthday gift?

About Juliana Olsson

Juliana has a masters in Museum Studies from Johns Hopkins University with a focus on exhibition, evaluation and education. She now works for the University of Wyoming Geological Museum on exhibits and public outreach—you can read all about her adventures in exhibit development at uwyodioramas.wordpress.com. She also writes for her own blog, www.thejulitheory.com, about museums, science, and other miscellany. When she's not blogging, she's most likely drawing, rock climbing, or talking about comics.
Posted in: Home & Family
COMMENTS
  1. Evan Guthrie Law Firm says:
    March 21, 2013 at 12:05 pm

    Thanks for pointing these out. I was unaware of deer carcass donation deduction and many of the others.

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