In a sign that accountants can get a little sleep deprived around tax season, the Minnesota Society of Certified Public Accountants (MNCPA) has published its annual insights into some of the top crazy tax schemes people tried on their tax returns last year. The data is collected from a survey of CPAs and goes a long way to showing that some clients will try anything. MNCPA Chair Nate Albrecht notes that, with such a complicated tax schedule it’s hard for individuals to know exactly what is and is not in play for deductions, but also that it’s ultimately their responsibility to get it right.
For all budding accounting students out there, look over this list as a great example of the kinds of things you can look out for in your own career!
- Expensive clothing: We all like to look nice, especially for business purposes. But you’re expected to arrive to work fully clothed (looking nice is a bonus).
- Baby grand piano: A client, who was a humanities professor, thought he could deduct a piano. Unless the professor was providing lessons as part of a small business, this was not an acceptable deduction.
- Misinterpretations of charitable donation: Unfortunately for one client, gambling losses didn’t qualify as a charitable donation to casinos or the Minnesota State Lottery.
- Foot powder for smelly feet: Refer to No. 1 — expected, and extra attention is a bonus.
- ‘Business’ boat: One client wanted to depreciate the cost of a large boat because it was used occasionally for client entertainment. You better set sail on that idea.
- Valley Fair season tickets: Unfortunately, amusement parks don’t qualify for a day care deduction.
- Cat food and litter: Your cats may be used to keep mice out of the barn, but their bare necessities aren’t deductible. In general, pet expenses aren’t deductible.
- A wedding to remember: A client wanted to deduct part of his wedding costs because more than half the guests were business-related contacts.
- Keeping yourself rejuvenated: Botox, tanning, nails and the like do not qualify as acceptable deductions.
- Commuting to work: You can get mileage reimbursement either through your work (if offered) or the government for mileage incurred while on the clock and for business purposes, but driving to and from work is not going to stick.