False teeth and other write-offs

By Evan Pondel Staff Writer
San Gabriel Valley Tribune


If you go on a safari, shoot an exotic beast and donate the mounted trophy head to a charitable organization, you can deduct the full cost of the adventure from your income taxes.

The loophole has triggered a cottage industry of travel groups that use the deduction as a marketing tool to attract the well-to-do sportsman. And until recently, lawmakers ignored the deduction because it was embedded so deeply in the tax code.

Big game trophies, false teeth, wigs, haircuts and Fido's root canal are among a bevy of items Americans try to and often succeed at deducting from their taxes.

And accountants say that with tax time just around the corner, 'tis the season for tales of the bizarre deduction.

"There is a lot of squeezing under the radar," said Michael Asimow, professor of law emeritus at the University of California, Los Angeles, who specializes in tax issues. "And many things that are not deductible under the law people will try to deduct anyway."

Robert C. Martin, owner of accounting firm RC Martin & Associates in San Bernardino, can recall several policemen who attempted to deduct the cost of their haircuts, saying it was part of their uniform.

"And I said absolutely not. That's personal. You'd be getting a haircut regardless of being a policeman," said Martin, who's been a practicing accountant for more than two decades. "My rule of thumb for tax deductions is that if you spend a dollar to make a dollar than it's deductible."

It appears that California taxpayers may be getting a bit more honest. In 2003, there were 5.8million tax returns with a total of $155.7billion in itemized deductions, compared with $155.9billion in the prior year.

Charitable donations ac-

counted for more than 10percent of the total dollars in itemized deductions, according to the Internal Revenue Service.

Economists say deductions from charitable donations are likely to rise this year as a result of Hurricane Katrina, along with a slew of other donations that continue to stream in from natural disasters in recent years.

But in the end, tax deductions actually do more harm than good for the nation as a whole, according to the Tax Foundation, a tax research organization based in Washington, D.C.

"This (big game hunting deduction) is an egregious example of the tax code, that doesn't help lower taxes for anyone," said Andrew Chamberlain, a staff economist with the Tax Foundation. "In our view, deductions like this are bad policy because every time you create a loophole you force everyone to pay higher tax rates."

Scores of doctors write off the scrubs they wear during the year. And false teeth are always a worthy deduction for taxpayers, young and old, because they're usually a remedy for a medical condition.

But Martin said it never ceases to amaze him when someone argues for a tax deduction that has absolutely no merit. A client of his wanted to write off the meals she consumed during her work day.

"Because I work, I have to eat,' she'd say. And, I had to tell her that the government isn't going to allow you to deduct your lunch," said Martin.

It's not only lunch that people are trying to deduct. How about your mother's mortgage?

Heinz Hercher, an accountant from Claremont, said he's had cases when clients say their mothers have no income and therefore can't deduct mortgage payments. "So they try to deduct mother's mortgage payments from their own taxes," he said. "And that is completely inappropriate."

Deducting your own mortgage, of course, is perfectly legitimate.

Attempts are also made to write off veterinary expenses, which are difficult to detect because of the ambiguous title of doctor attached to the bill.

But the tax code also is open to interpretation, and accountants may have differing views on what's deductible and what's not.

Home improvements are usually not deductible, unless something is installed for medical reasons. For example, a homeowner might install an elevator because they are handicapped, however, they wouldn't be able to deduct the cost of the elevator if the homeowner simply installed it to increase the value of their home, Asimow said.

Plastic surgery is another murky area. Tim Good, partner at Windes & McClaughry in Torrance, said if the surgery is strictly cosmetic then don't deduct it.

So even though it could help them in their careers, movie stars might find it hard to nip and deduct. "If an auditor found something like that, I'm certain it would inspire a spirited conversation," Good said.

At then end of the day, Good advises to let common sense be your guidepost.

"But be careful," he said. "Don't make assumptions. And never shoot from the hip."

evan.pondel@dailynews.com

(818)713-3662

When in Doubt, deduct it out.

I've got a friend that is on the road all the time for his work and he deducts his meals when he is out.

I believe meals are deductible as long as you are more than 50 miles from your place of employment, or something like that and only if you are on the job, can´t really remember my tax class

quote:

Originally posted by Patricio Gaudiano:
I believe meals are deductible as long as you are more than 50 miles from your place of employment, or something like that and only if you are on the job, can´t really remember my tax class

Ok that makes sense then.