Certain drugs qualify as legitimate medical deductions. But when they're recreational drugs, like say cocaine or ecstasy, the expenses are a little harder to slip by the IRS.
Dave Spaulding, an enrolled agent at Janover LLC, a financial planning firm, said clients who were in a rock band actually tried to deduct an item labeled "drugs" as "travel & entertainment" expenses.
The total cost of the "drugs" was in the high five-figures, and the band didn't even try to disguise them as prescription or medical drugs.
"The band's bookkeeper had concluded that the cost of recreational drugs was necessary and ordinary," he said. "Apart from admitting to possession of illegal drugs, the IRS would strongly differ with their tax position."
Needless to say, Spaulding's firm removed the deduction from the band's tax form.
Taxpayers can claim up to $13,360 for each child they have adopted in the past 6 years.
|November jobs report: Unemployment falls to 7%|
|Five key numbers behind the jobs recovery|
|Where should you put your money now?|
|2 million Facebook, Gmail and Twitter passwords stolen in massive hack|
|Sick days: A luxury many hourly workers don't have|