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Crazy Tax Deductions Allowed by the IRS

Matt D'Angelo
Matt D'Angelo
Freelance Writer
Business News Daily Contributing Writer
Updated Jan 23, 2023

These off-the-wall tax deductions are legal, believe it or not. Do you qualify for any?

As tax season rolls around, businesses across the country are wondering what deductions they can itemize before they file. Certain businesses have come up with some surprising, creative deductions that have been accepted by the IRS or U.S. Tax Court. Some of these may not apply to your business, but as tax deadlines approach, let’s take the opportunity to enjoy the creativity and absurdity of business law.

While these are interesting and amusing, be sure to consult your accountant or a tax professional before actually claiming them as deductions. 


Turns out that if you need to take limousines for work purposes, that can be written off as a deduction. Especially for self-employed professionals, like models and entertainers, writing off everything pertaining to work might mean writing off your limo rides or hair and makeup purchases.

Gym memberships

Your gym membership may qualify as a medical expense. There are some criteria, however, that you’ll have to meet. For instance, a doctor has to diagnose you with a specific medical condition. Technically, you should be using the facility as a way to treat this medical condition as well, and you can’t have belonged to the gym before your diagnosis. So, as with many of these deductions, while it is possible, you would need to be in a pretty specific scenario to actually write it off.

Free beer

In the early ’80s, a tax court ruled that businesses can write off free beer as a tax deduction in some instances. The business owner was providing free beer to customers and wrote off the expense. While it may not be a good idea to try something similar, it does provide an interesting opportunity to consider for stocking in-office beer fridges; you may be able to write it off.


In the past few years, businesses have been plagued by ransomware attacks from cybercriminals demanding large sums to decrypt their essential data, usually in bitcoin. While it isn’t recommended that businesses pay the ransom, sometimes companies have no choice but to pay, or risk losing much more.

If you do pay, the amount can be itemized on your taxes as a business expense similar to other acts of theft and extortion. You’ll need to provide proof of the incident and the amount paid, which can be in the form of a police report, to the IRS.

Bitcoin for good

While bitcoin sometimes has a negative connotation of being the favored currency of cyberattackers, it can make a positive impact both on the world and on your taxes. As with any profit gained from investments, you must report money made from investing in bitcoin and pay taxes on it. However, instead of pocketing the profit, giving your bitcoins to charity allows you to take a deduction on your taxes.

Giving to an organization like Fidelity Charitable, which accepts bitcoin, will give you a tax deduction equal to the market value of the bitcoin while avoiding paying capital gains tax, according to Nabil Ashour, director of corporate communications at Fidelity Charitable.

Pets on the job

Pets are not dependents and cannot be claimed on taxes; however, if you use pets for your business, certain expenses are deductible, according to Joshua Zimmelman, president of Westwood Tax & Consulting. If you breed pets, use them in your advertising materials or have a guard dog, you can deduct expenses like food, grooming, and training, but these costs must be related to the hours your pet works, and they need to be documented.

“This only applies to certain animals in certain situations, though,” Zimmelman said. “For example, you can say that a Rottweiler is a watchdog, but don’t try that with a hamster, or you will probably raise a red flag at the IRS.”

Hair dye

In the same way pets can be used for advertising and branding, certain aspects of yourself can be considered a business expense if they’re used this way. Bobbi Baehne, president of Think Big Go Local, dyed her hair purple for a convention and has kept it ever since. She is the face of the company, and the purple hair became part of her company’s branding.

“My accountant quickly let me know that the purple hair has become part of our brand and, in turn, is advertising for our company,” Baehne said. “So I get to write off the $200-plus I pay a month to keep it fun and fresh.”

Office fitness and health

Fitness and health initiatives have lots of potential for deductions. While you can’t deduct gym memberships for employees, if you own and maintain an office gym, then you can deduct those expenses, according to Taxbot. Programs to help employees quit smoking are also deductible.

Bodybuilder oil

Professional bodybuilders can itemize their ordinary and necessary costs, including body oil. The slick stuff that makes their muscles shine is deductible, but a tax court ruled that expenses like food and supplements used to get the bodybuilder physique don’t qualify, according to TurboTax.

Cosmetic surgery

A tax court case in 1988 opened the door for adult entertainers to deduct breast augmentation surgery, according to TurboTax. A stripper claimed a $2,088 deduction for her surgery, which was initially denied by the IRS but accepted by the tax court when she appealed. The court ruled that the augmentation was a legitimate business expense because it could result in bigger tips and more profit for the stripper.

Landscaping and home improvement

For self-employed and at-home workers, sprucing up the homestead can be itemized as long as you can prove the improvements are tied to your business. For example, if you often meet with clients, making your home more appealing can break down to deductible expenses, including the tools you use for landscaping and home improvement.

Renovations on your home to make space for an office can also be deductible. Be aware that the IRS has strict guidelines on what constitutes a home office, though. Primarily, your home office must be a principal place for your business and not used for recreation.

Business trip to the Bahamas

Travel expenses around the country are commonly deductible, and this also extends to most of North America. You can itemize expenses for travel to the Bahamas, Bermuda, Costa Rica and other Central American spots.

In many cases, you cannot deduct travel expenses to places outside North America. To do so, you’ll need to provide proof that it was reasonable to hold the meeting at that location. For example, you’d need to explain to the IRS why your convention in China couldn’t be held anywhere else. However, you don’t have to provide reasoning for why your meeting or convention was held in these deductible Central American locations.

The expenses of attending a convention or seminar on a cruise ship are also deductible. However, you must provide comprehensive proof that the cruise was mostly devoted to business activities and that you participated in them yourself.

Whaling ships

Speaking of ships, whaling captains can itemize expenses related to their ships, such as repairs. Whaling is highly illegal for all but certain cultures. In the U.S., you must be a recognized captain of the Alaska Eskimo Whaling Commission to qualify for the deduction. If you’re practicing unsanctioned whaling, you may have bigger problems than missing out on a tax deduction.

Andreas Rivera contributed to the reporting and writing in this article.

Image Credit: Drazen_Zigic / Getty Images
Matt D'Angelo
Matt D'Angelo
Business News Daily Contributing Writer
I've worked for newspapers, magazines and various online platforms as both a writer and copy editor. Currently, I am a freelance writer living in NYC. I cover various small business topics, including technology, financing and marketing on and Business News Daily.