During tax time, it's always fun to review some of the more unusual expenses incurred by taxpayers. Here are a few along with the tax treatment suggested by the IRS or mandated by the courts.
Abortion: The cost of legal abortion is deductible as a medical expense.
Affinity credit card: A taxpayer who uses a brand-name affinity credit card and can either receive rebates personally or donate them to charity can claim a charitable contribution deduction for the amount of the donated rebates only if the taxpayer makes an affirmative election to donate the rebates to charity.
Animals: The cost and care of guide dogs and other animals aiding the blind, deaf, and disabled are deductible as a medical expense.
Assisted living: Medical expenses paid as part of the cost of assisted living arrangements are deductible medical expenses. The total amount must be allocated between medical and non-medical expenses, whenever the medical expenses are paid periodically or in a lump sum covering all expenses. Taxpayers who live in an independent living facility that also offers assisted living accommodations may allocate a percentage of the fee equal to the percentage of the institution's expenses that are spent for medical care over the taxpayer's lifetime and are not required to use the actuarial method to determine the portions of monthly service fees that are allocable to medical care.
Blood: The fair market value of blood donated by an individual to a qualified charitable organization is not deductible as a charitable contribution because furnishing blood for a transfusion or to a blood bank is analogous to the performance of personal services by the donor, rather than a contribution of property.
Car pools: A taxpayer cannot deduct the expenses of using his car in a nonprofit car pool. However, any payments received from passengers are treated as reimbursement of the taxpayer's expenses and do not have to be included in the taxpayer's income.
Checking account fees: Fees charged by a bank for the privilege of writing checks on a personal checking account cannot be deducted, even if the account pays interest.
Club dues: No deduction is allowed for the cost of membership in any club organized for business, pleasure, recreation, or other social purpose, including athletic, luncheon, sporting, airline, and hotel clubs.
Cosmetic surgery: Surgery for purely cosmetic reasons that is directed at improving the taxpayer's appearance and does not meaningfully promote the proper function of the body or prevent or treat an illness or disease is not deductible as a medical expense.
Diaper service: Diaper service for normal babies is considered a personal expense rather than a deductible medical expense. However, the IRS has allowed a deduction for diaper services in the case of a severely brain-damaged child who had to be diapered.
Ear piercing: The cost of ear piercing is a not a deductible medical expense.
Estate planning advice: Fees for estate planning advice with regard to income taxes are deductible as investment expenses subject to the 2% floor on miscellaneous itemized deductions.
Eye surgery: The cost of radial keratotomy or LASIK eye surgery is a deductible medical expense.
Fertility enhancement procedures: The cost of fertility treatments, including procedures such as in vitro fertilization (including temporary storage of eggs or sperm), and surgery, including an operation to reverse prior surgery that prevents having children, is deductible as a medical expense.
Foreign charitable organizations: Although contributions to a foreign church or charitable organization generally are not deductible, donations to certain Canadian, Israeli, and Mexican charitable organizations may be deducted as charitable contributions.
Funeral expenses: Burial or funeral expenses, including the cost of a cemetery lot, are nondeductible personal expenses for which no deduction is allowed for federal income tax purposes.
Guide dogs: The cost and care of guide dogs and other animals aiding the blind, deaf, and disabled are deductible as medical expenses.
Hair transplant: The cost of a hair transplant is not a deductible medical expense because the procedure is directed at improving the patient's appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease.
Homeowner association: Annual assessments paid to a homeowners association by its members for the exclusive purpose of promoting the recreation, health, safety, and welfare of the residents and for maintaining common areas of a residential housing project are not deductible as real property taxes. Additionally, donations of money or property to a homeowners association are not deductible as charitable contributions.
Investigation: The costs of investigating publicly held companies with a view towards the possible purchase of their stock are nondeductible capital expenditures, to be added to the basis of the stock acquired.
Legal expenses for disability benefits: Legal expenses incurred to secure Social Security disability payments are deductible expenses for the collection or production of income subject to the 2% floor on miscellaneous itemized deductions.
Lottery tickets: The cost of raffle, bingo, or lottery tickets is not a deductible charitable contribution. Purchasers of losing raffle tickets are allowed a deduction as a gambling or wagering loss, but only to the extent of the taxpayer's gains from wagering transactions.
Marijuana: Amounts paid to obtain a controlled substance such as marijuana, in violation of federal law, are not deductible medical expenses even if state law permits the use of the substance when purchased with a physician's prescription.
Missing stock: A taxpayer who must post an indemnity bond to replace taxable securities that are mislaid, lost, stolen, or destroyed can deduct the premium paid to buy the bond and the related incidental expenses as investment expenses.
Natural childbirth classes: Expenses paid for natural childbirth classes are nondeductible personal expenses rather than medical expenses.
Navajo healer: Amounts paid to Navajo medicine men for Navajo healing ceremonies called "sings" are treated as deductible medical expenses.
Nutritional supplements: Nutritional or herbal supplements, vitamins, and natural medicines are not deductible as medical expenses unless they can be obtained legally only with a doctor's prescription.
Organic food: Taxpayers who are allergic to the chemical compounds found in herbicides and pesticides may claim a medical expense deduction for the cost of organic food, but only to the extent it exceeds the cost of similar chemically treated food.
Passport: The cost of a passport procured in connection with a business trip may be deductible as an employee expense subject to the 2% floor on miscellaneous itemized deductions. The cost of getting a passport also may be deductible as a moving expense if the passport is procured for a move in connection with the start of work at a new job location outside the U.S. and its possessions.
Reader for the blind: Payments made by blind employees to readers for services performed in connection with the work of the blind employee may be deductible as impairment-related work expenses that are not subject to the 2% floor on miscellaneous itemized deductions.
Remedial reading courses: A remedial reading course for a child with dyslexia caused by congenital damage to the brain is deductible as a medical expense.
Rent not collected: If the taxpayer's tenant fails to pay rent to the taxpayer for the use of the taxpayer's property, the taxpayer cannot claim the value of the unpaid rent as a deductible theft or casualty loss.
Sailboat: Expenses incurred in moving a sailboat from the taxpayers' old residence to their new residence in connection with a job-related move are deductible moving expenses.
Sex change: Expenses incurred in connection with an operation to change the gender of the taxpayer's child are deductible as medical expenses.
Smoking cessation programs: Smoking cessation programs and prescription drugs designed to alleviate nicotine withdrawal are deductible as medical expenses.
Stockholder meetings: No deduction is allowed for the cost of transportation and other expenses paid to attend stockholder meetings of companies in which the taxpayer owns stock but has no other interest, even if the taxpayer is attending the meeting to get information that would be useful in making further investments.
Trust kit: The cost of a kit that instructs a taxpayer how to set up a family estate trust is not deductible as an investment expense or an educational expense.
Uniforms for volunteer work: If the uniforms must be worn while providing volunteer services for a qualified organization, their cost and upkeep are deductible as charitable contributions.
Vitamins: Nutritional or herbal supplements, vitamins, and natural medicines are not deductible as medical expenses unless they can be obtained legally only with a doctor's prescription.
Watch: The cost of a wristwatch is a nondeductible personal expense, even if the taxpayer is required to know the correct time to perform the duties of his job.
Wig: A medical expense deduction may be available for the cost and maintenance of a wig purchased on a doctor's advice that the wig was essential to the mental health of a patient who lost all her hair as a result of disease.
Roy Lewis lives in a trailer down by the river and is a motivational speaker when not dealing with tax issues, and he understands that The Motley Fool is all about investors writing for investors. You can take a look at the stocks he owns as long as you promise not to ask him which stock to buy. He'll be glad to help you compute your gain or loss when you finally sell a stock, though.