What would you do to reduce your tax bill?
Some Canadians have come up with creative ways to justify tax deductions and cut their tax owing. While some were rejected, many others were successful.
Cleo Hamel, senior tax analyst with H&R Block Canada, shares some of these unusual deductions below, and breaks down what worked and what didn’t.
These are very creative and {Almost} Unbelievable Tax Deductions! U
ACCEPTED
Pet food: While you can’t usually claim pet food, a farmer was allowed to claim cat and dog food because it was for outdoor pets acquired to keep wildlife away from his blueberry crop. Zeitz v. The Queen [2002] 4 C.T.C. 2292
Spousal amount for widows: If a widow remarries immediately after her husband dies, both the deceased husband and her new husband can claim a spousal amount for her. CRA Views 2003-0050255 Unbelievable Tax Deductions
Diamonds are a girl’s best friend: A stripper received nearly $2 million in gifts from a happy customer and was allowed to keep them tax free. The Canada Revenue Agency (CRA) tried to argue they were income, but the Tax Court disagreed, ruling they were indeed gifts. Landry v. The Queen [2009] TCC 399
Gambling without a plan: The CRA tried to argue that two brothers in Quebec were operating a business by playing Pro-line Sports Lottery regularly. A judge ruled the brothers did not have a discernable plan or system for placing their bets and had won by luck, so the money was not considered income. Leblanc v. The Queen [2006] TCC 680
Additional food needed by couriers: The Federal Court of Appeal ruled the additional food required by a foot and transit courier because of the extra energy he expended could be claimed as a business expense. Scott v. The Queen, 98 D.T.C. 6530
REJECTED
Income Tax Act incomprehensible: Arguing that the Income Tax Act is difficult to understand is not a valid defense when charged with failing to file an income tax return. R. v. Meikle [2003] 4 C.T.C. 294
Ballet lessons: While the cost of your child’s ballet lessons does qualify for the Children’s Arts Credit, it cannot be claimed as a childcare expense. Levine v. The Queen [1996] 2 C.T.C. 2147
Haircuts: Even if your job requires you to be well-groomed and get a haircut regularly, the cost of the cuts is not deductible against your employment income. Rouillard v. The Queen [2000] 4 C.T.C. 2065
Trips to Vegas: One taxpayer unsuccessfully argued that trips to Las Vegas and Arizona should be a medical expense since a doctor recommended that visiting warmer climates would help treat a skin condition. Goodwin v. The Queen [2001] 4 C.T.C. 2906
Seized marijuana: Marijuana that was seized by the police cannot be treated as a “loss of inventory” deductible against the taxpayer’s income from illegal drug trafficking. Neeb v. The Queen 97 D.T.C. 895
I chuckled at ‘Trips to Vegas’ as my doctor once told me that my skin would be better suited for Maui. I have to admit, there was a period of wondering how to turn that one into an actual prescription!
If you’re not sure what deductions and tax credits you can claim, consider an online tax preparation software program like H&R Block Tax Software, which will guide you through step-by-step tips to identify every deduction or credit, calculates your return as you go, and ensures you get your maximum refund.
You can even file one return for free until March 31!
If you would rather leave it to an expert, you can drop by an H&R Block office where a tax professional will review your previous returns for free.
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This is a sponsored post for H&R Block. As always, the opinions on this blog are 100% my own.
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Extra food for couriers? Wow! I wonder how many people actually track and deduct it.
Ha, I know!!
“Income Tax Act incomprehensible” << Ha! Can you imagine if that passed?
I know … so funny!
Interesting tips, but I wouldn’t chance it here in the U.S. Too expensive to defend yourself.
So true, and that applies to everywhere. Better to check with H&R Block and not be sorry.
I always choose H&R Block. I’ve used them for 15 years now!
Same here Ellen! I recall waking into H&R Block the first year I had my Summer job! They were and still are the best!
These made me laugh. I don’t think I’d have the nerve to ever get that creative with my accounting.
Can you imagine!?!? Hahahaha!
that’s some crazy crazy stuff!! I laughed at the gambling one.
That one is awesome, kudos for the creativity!
It surprises me how many items can be deducted!! I never realized that when I was younger, now that I am older it is like a whole new world!
It is!!
I am surprised by some of this. Gosh, I wish I could claim pet food. I spend a small fortune on it.
Isn’t it?! Who would have thought … can i claim the food the kids eat? Technically it’s my job as a Mom right?! 🙂
Wow, some people really tried to get away with murder with their deductions, didn’t they? A trip to Vegas for getting sun? LOL!
Ha, got to give him credit for trying!! lol
Wow! There sure were some of those deductions that rather surprised me! I bet they wouldn’t have been rejected in the US; because you have to pay taxes on expensive Gifts and “winnings” also. Blah.
Yep, like lottery wins right? We don’t have to, I think – sure would like to win and find out!! 😉
I would love to be able to receive diamonds as a gift and not have to pay taxes, LOL
Crazy!
That’s incredible! Although I’ve heard that Canadian tax laws are definitely different than American ones. Amber is right, you have to pay taxes on everything here in the US *rolls eyes* I particularly like the one about the stripper being able to keep her $2 million in gifts. LOL
Yep, so different in many ways!
HAHA! Some of these are really great! Tax season is crazy isn’t it?!?! Good thing to ahve someone who knows taxes on your side!
It can get insane, very stressful for most. That’s why I’m super happy to pass my stuff onto H&R Block – easy peesy!
Hahah 🙂 That’s great.. I have to shake my head at the silliness of people 🙂
No seriously? Pet food??!!! Wow!
Ha, that is a good one!
I need as much help as possible with my taxes! It’s like greek to me. Those are some unbelievable deductions! LOL
So true and each year it’s changing – I’d rather trust H&R Block who know rather than take my chances!
Those are sooo interesting! I wish I could pull off claiming items companies send me, regardless of if I ask for them or do anything about them, as “gifts”. Doesn’t fly in the US.
Hey, we didn’t file yet. Perhaps I should squeeze a few in there. LOL A trip to Vegas sounds legit to me!!!
Ha!! Now you’re thinking!! Good luck with that!! 😉
We use H and R block for our tax needs here!
same here Mel, they are awesome!
oh my goodness, really???? Someone these tax deductions are ridiculous! Guess I shouldn’t be surprised.
I’d love to hear more examples, so entertaining!
Now those are interesting! What a fun read…. I really do wish getting my hair done was deductible. I’d be all decked out all the time 😉
YES!!! love that idea! Technically, we do have to look our best when on press trips right? …. ??
Oh I love the one about pet food. We spent hundreds last year on that!
kid food …. now that’s something I’d like to claim as a deduction!
It is so funny some of the things that can actually be claimed as deductions but that is crazy to think the things people try!
Crazy but you gotta give them credit for trying!! I’d ask H&R Block first though, I’d hate to take that chance with the CRA!
OMG, these are hilarious!!!! The things on here made me chuckle, taxes are stressful for me, I hate doing them!
Amen! Not my idea of a fun time!
I live in Vegas! That’s a funny one!!
🙂
I have a friend that deducts 50% from every lottery ticket she buys as a charitable donation. She claims 50% of funds collected by the lotteries is donated by the government to charities so she considers that 50% of her purchased tickets applies in the same manner. She has been doing this for years. Is it a legit deduction?
WOW!!! I have no idea Pat but I’ve never heard of this! If you find out please let me know!!
Great post! I wish I could claim my pet food, lol.
Wouldn’t that be nice?! lol
This is awesome info, Tammy! Thanks for the post!
Glad you liked the read Janice! 🙂
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