A Look At The Craziest Tax Write-Offs
(CBSMoneyWatch) It's hard to think there's anything funny about taxes when you're under a mountain of paperwork, but CBS News contributor and analyst Mellody Hobson has a little comic relief for taxpayers. In all her research about taxes, she came across some fairly ridiculous write offs the IRS has allowed -- and some crazy things people have tried and failed to slip by the IRS.
First, you'd be amazed about what people try to write off concerning their pets, and it's no wonder why -- they're expensive. According to the ASPCA, dogs and cats both cost over $1,000 a year. There was the case of the woman who claimed an unusually high amount of medical expenses for a dependent, but she didn't have a spouse or any children. Turns out the "dependent" was her dog. Her accountant set her straight that if it's covered in fur, you can't claim it as a dependent. In general, pet expenses are not deductable, but there are a couple surprising exceptions.
For instance, you can deduct expenses related to a foster animal if the goods or services are solely for the foster pet and if the organization is a registered non-profit. That means it has 501(c)(3) tax status. Also, expenses exceeding $250 may require a letter from the organization. In a landmark tax court case, a California woman was able to deduct 90 percent of the $12,000 in deductions she claimed for the 70 cats she fostered. Seventy cats. But this wasn't your average crazy cat lady -- she was working with a legitimate charity.
