Two Tax Truths and a Lie: Here’s What You Can and Can’t Get Away With

Most taxpayers will likely agree that the U.S. tax code is complicated and hard to understand. So, naturally, a few common tax myths have popped up over the years. And some of the most common myths revolve around tax deductions.

Some tax deductions that seem completely legitimate are actually fake, while others that seem unusual or even silly qualify for beneficial tax treatment. Here’s a look at tax myths and truths to help you claim the correct tax deductions.

Truth. As with many things in the tax code, your ability to deduct an expense depends on its legitimacy, usually for business or medical purposes. While you can’t deduct every meal you feed the family dog, there’s a surprising range of instances where you can deduct pet expenses.

On a business level, if your pet generates income for you, you’ll likely be able to fully deduct your “ordinary and necessary” pet expenses. For example, if you own a dog that’s in commercials, you might be able to deduct your pet expenses. If you raise horses for breeding, that can also constitute a business. So, your animal expenses are likely deductible.

Going outside the box a little more, one junkyard owner was able to deduct the cost of cat food. Why was this deduction allowed? Because the owner used the food to attract neighborhood cats, who subsequently kept his yard pest-free.

You can also get a medical deduction for certain pet expenses. For example, if you need a guide dog or service animal, the IRS allows deductions for the costs of buying, training and maintaining that animal, including food, veterinary care and grooming.

Lie. Since the IRS can be fairly generous about claiming tax deductions for business expenses, it might seem logical that your costs for driving to and from work every day should be deductible. Unfortunately, that is simply a tax myth.

Yes, you might be able to convince yourself and others that driving to work should fall under the category of a business expense. Unfortunately, the IRS clearly states the daily transportation expenses you incur when traveling from home to the office are generally nondeductible.

But, as with most IRS regulations, there are certain exceptions. You might be able to snag a transportation deduction in certain scenarios. A few examples include (but are not limited to):

  • Traveling to a temporary workplace outside the metro area where you live
  • Seeing customers or clients
  • Going to a business meeting that isn’t held at your normal workplace

Otherwise, you’ll just have to bear the costs of fuel, maintenance, depreciation or public transportation on your own.