Jim Hamill
Oscar Wilde said: “Imitation is the greatest form of vlei that can give mediocrity to greatness.”
If I only have my mediocre ideas for a rubric, I’d rather borrow from some big taxpayers.
As a Class A tax nerd with taxes, I read several monthly publications with names like ‘The Journal of Taxation’. Today I borrow from the “Shop Talk” section of the publication (I know too many details), which I simply adore, a revelation that officially makes it to my column of shame.
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The authors of Shop Talk are recognized tax experts. We use the term “expert” unfortunately too often. These authors ask some questions about ‘expert’ advice on TV advertising for a popular tax software product.
These ads let you know that if you buy the software, you will have access to expert tax advice. This advice will encourage you to claim all available deductions. To entice you, the ads give some examples of things you can miss.
With the introduction we are on our way! You can deduct the cost of a clarinet if you play the clarinet to correct an oversized bite. If you have a job as a hand model (remember Joey’s ‘twin’ from ‘Friends’?), You can deduct the cost of a manicure.
If you use a tree house as your primary business location, you can deduct the cost of internet access in the tree house. A photographer can deduct the cost of props used for shoots – for example, a cowboy puppet sitting on a saddle on a dog.
A circus clown can deduct the cost of size 26 shoes he wears during his performances. I almost used “clown shoes”, but my wife reminded me that it fits most of my wardrobe, so I decided to be more specific.
This is all good news. Now I will do what I do best, namely to place a dark cloud on someone else’s parade.
We use the term ‘expert’. The term brings a certain sense of guilt if you do not heed the advice of the expert. They surely know what they are doing.
Once I was driving on icy roads in a Lincoln Town Car from Chicago’s Midway Airport to the western suburbs. The driver complained loudly that the ‘idiots’ on the road, that is, everyone except him, do not know how to drive on ice.
My manager was a professional. I know, because he told me repeatedly because he drove too fast for the conditions (my formative years were spent on snow and ice). So I quickly texted my family about my estate documents and passwords for my financial account.
The trick is to know the difference between the professional person you can trust and the big bad guys who seem to think a little too highly of themselves. It’s not easy.
So, what about that clarinet? There appears to be an obscure 1962 IRS ruling that made it possible to deduct a medical expense for a clarinet. Obscure means fact-specific. In this case, an orthodontist suggested that a clarinet could help with a congenital and severe defect inflicting on a child.
I’m not sure how many clarinet players fit these facts. Nevertheless, medical expenses require that you specify deductions (less than 10%) and that the total medical expenses exceed 7.5% of your adjusted gross income.
The manicure of the hand model is even more suspicious. I wrote some time ago about captions for a TV personality. Same principle. The tree house? It should be the most important place of business or a regular meeting place with customers.
The photographer’s props? Well OK, probably deductible. But the Shop Talk authors caught the interesting issue of the props. The cowboy puppet? The hall? The dog? The ad never said.
The clown had the best case for subtraction. Not even Shaquille O’Neal wears a size 26. The shoe is therefore not suitable for ordinary wear.
But even our clown loses his deduction if he is not self-employed. Same for the photographer, the tree dweller and the hand model.
If it is your tax return, you are responsible for it. Be careful who you accept as an expert. If this sounds too good to be true, it might be.
Jim Hamill is the director of tax practice at Reynolds, Hix & Co. in Albuquerque. He can be reached at [email protected].