Add a pool or an elevator to your home, and you may qualify for a deduction or tax break — but only if the home improvements are medically necessary, said Glen Ross, chief executive of Prosado.com, a site that helps consumers find a tax preparer.
You’ll need a prescription or doctor’s letter stating medical need, as well as detailed receipts for the costs.
Gambling Losses
If you manage to hit it big at the blackjack table or slot machines, Uncle Sam will tax those winnings as reported on your form W-2G, said Walt Hatter, a certified public account and founder of Hatter & Associates in Fort Worth, Texas. But with the odds in the house’s favor, chances are you accumulated some losses along the way, and those may be deductible. “You can deduct gambling losses up to the extent of your winnings, but you need a way to document that,” says Hatter. If you use a casino’s loyalty card when playing, the member services desk can provide details of wins and losses throughout the year as sufficient documentation. But check with your tax preparer before making the effort — some states don’t allow you to deduct gambling losses, he said.
Steel-Toed Boots, Posing Oil and Other Job-Related Expenses
Two oddball examples of business deductions the Internal Revenue Service has allowed in the past: breast implants for an exotic dancer and posing oil for a professional bodybuilder. The general rule of what’s deductible is that it must be “ordinary and necessary” for your profession.
New Pets
Fido and Fluffy — and all their associated expenses — may be deductible if your pet is a qualified service animal. The IRS allows taxpayers to deduct the cost of “buying, training and maintaining” a service animal, which includes food, grooming and veterinary care. But there are a few hoops. In addition to a doctor’s note or prescription detailing your medical need for a service animal, you’ll also need to register the pet with an agency that certifies its status.
Dance Lessons, Diet Plans and Other Healthy-Living Purchases
Dance lessons, organic food, massages, musical instruments, diet plans — all have been allowable as deductible expenses. “If a doctor prescribes it and deems it medically necessary, then yes, that can be a qualified medical expense,” says Ross. For tax year 2012, taxpayers can deduct medical expenses that exceed 7.5 percent of their adjusted gross income; in 2013, costs must top 10 percent of AGI. Similarly, if a family member is in an assisted living or nursing care facility, ask for a breakdown of what expenses are medically necessary, said Hatter.