Personal Finance

A ghost buster and other weird tax deductions people have tried to claim

Published

2 years ago

April 9, 2024

With the April 15 tax deadline closing in, let’s discuss deductions.

I’ve attended my fair share of multilevel marketing presentations where some “expert” claims you can turn a vacation into a deduction by scheduling a quick business meeting.

A trip becomes deductible only if the purpose is primarily business-related. Conducting a minor business meeting while on vacation doesn’t instantly transform what is really a vacation into a business trip, according to the IRS.

I’m always amused by what people try to deduct, so I asked a tax professional about the wackiest things she’s seen. Alison Flores, manager of the Tax Institute at H&R Block, highlighted some of the most creative and oddly legitimate attempts.

A client asked whether he could deduct the cost of different beers he’d taste-tested.

This person had found a way to monetize his peer-review process.

As it turned out, he had a blog and did make self-employment income, “so we had to determine which beer drinking was related to the blogging and which was just personal expenses,” Flores said.

This was a yes for deductibility. It was an ordinary and necessary business expense.

But Flores cautioned recreational beer drinkers not to try this on their tax returns.

“If you are doing it for fun, going out with the guys to drink beer and watch basketball, that’s personal and doesn’t look like a business,” she said. “There is a small fraction of people drinking beer who can deduct their beer.”

The mother of a TikTok star wanted to take a deduction for the toys that her child plays with off-camera because they are occasionally seen in the backdrop of her videos, Flores said.

“The toys looked like personal use,” she said. “It did not seem like a business expense.”

So, it was a no on the toy deduction.

3. Feeding the business mascot

People try to claim the darnedest deductions to reduce their tax bills, especially for business expenses.

In this case, a client who took her dog to work every day wanted to deduct the cost of doggy treats and toys that were kept for it at the office.

Is that a legitimate business expense?

The dog had a positive impact on clients, the person argued.

But, nope. Definitely not a deduction. It’s a pet and a personal expense.

Now, if it were a guard dog, expenses could be counted as a business expense, Flores said.

One client was advised by her doctor to exercise more for general health reasons, Flores said.

Could the cost of her water aerobics class be deducted as a medical expense?

By the way, to qualify for a medical deduction, your expenses have to exceed 7.5 percent of your adjusted gross income for the year.

“Most people don’t get past that threshold, Flores said.

The 7.5 percent threshold has long been a deterrent. But now coupled with the higher and rising standard deduction, this deduction is ruled out for many taxpayers, according to IRS spokesman Eric Smith. In tax year 2017, just over 10 million taxpayers claimed it. By tax year 2021, the most recent year for which data is available, that number had dropped to just under 4 million.

“Those that do have a lot of expenses and could qualify will find our IRS Publication 502 a useful reference,” he said.

If you want more personal finance advice that’s timeless, order your copy of Michelle Singletary’s Money Milestones.

Then there’s the businessman who wanted to take a mileage deduction for his trips to and from the local pub for his afternoon cocktails.

Now, if he were going to the pub to meet a specific client and paying for drinks and a meal, that could be deductible, Flores said.

Because of the “ordinary and necessary” standard that applies to business expenses, details, facts and context matter a lot, Smith said.

“A given expense could be ordinary and necessary for a given taxpayer in one line of business but not in another,” he said.

6. Cost of hiring a ghostbuster

One woman asked whether the service she used to cleanse her home of bad spirits could be expensed as medically necessary.

“It may have made her feel better, but it’s not a medical expense,” Flores said.

7. Upgrading your vehicle

This final one isn’t unusual, but important to note.

Flores said she’s received questions about the medical deduction for upgrading a van for a disabled person.

“For anyone in that situation, it may be unlikely that they think of taking a medical deduction for the upgrade,” she said.

The challenge in many cases is exceeding the 7.5 percent of your adjusted gross income per year for medical expenses.

One strategy is to lump expenses in one year. So you might install a wheelchair lift for the van and make modifications to your home, such as putting in a ramp or renovating a bathroom to make it more accessible.

The deductible cost of renovations (such as installing an elevator) is the difference between the cost of the improvement and the added value to the home. However, many modifications such as widening doorways do not add value and are fully deductible, Flores said.

Personal Finance

Maximizing Returns in High Rate Climate and market uncertainty

Published

3 days ago

July 21, 2026

Business Finance News

In the macroeconomic environment of late July 2026, personal cash management requires an active, structured approach to wealth preservation. With central bank benchmark rates remaining elevated to ensure long-term disinflation, conservative yield-bearing vehicles—such as short-term U.S. Treasury bills, money market funds, and high-yield savings accounts (HYSAs)—continue to offer reliable nominal returns between 4% and 5%. For individual investors, maximizing net returns requires moving beyond passive checking accounts and executing a disciplined cash laddering strategy.

Leaving substantial liquid capital in traditional bank deposits creates an invisible drag on personal net worth due to ongoing inflation. By implementing a tiered liquidity framework, individuals can split emergency cash reserves and short-term capital allocations across rolling maturities. Allocating cash into 4-week, 8-week, and 13-week Treasury bills creates a continuous cycle of maturing liquidity, allowing investors to continuously reinvest capital at prevailing market yields while maintaining immediate access to emergency funds.

Tax efficiency represents a critical dimension of high-yield cash optimization. For high-earning individuals residing in states with substantial local income taxes, direct holdings in short-term U.S. Treasury instruments often deliver superior net post-tax yields compared to standard commercial bank HYSAs. Because interest earned on federal Treasury bills is strictly exempt from state and local taxation, investors can retain a larger portion of their compounding interest gains without taking on additional credit or market risk.

Ultimately, personal wealth accumulation in mid-2026 relies on intentional capital deployment. Cash should be managed as a productive asset class that generates consistent, risk-free returns. Regularly auditing account yield terms, automating recurring transfers, and leveraging tax-advantaged fixed-income instruments ensures that personal liquidity remains fully optimized against macroeconomic fluctuations.

Personal Finance

Algorithmic Wealth Management: Balancing Automated Financial Planning with Human Oversight

Published

4 days ago

July 20, 2026

Business Finance News

Balancing Automated Financial Planning with Human Oversight

The personal finance industry in July 2026 is experiencing a technological evolution, driven by the wide deployment of next-generation algorithmic wealth management tools. Modern digital financial platforms have expanded far beyond basic automated index investing; today’s robo-advisors utilize real-time tax-loss harvesting, dynamic portfolio rebalancing, and hyper-personalized spending analysis to optimize retail investor outcomes. However, as these digital solutions become ubiquitous, investors face the crucial challenge of balancing automated execution with human strategic judgment.

The core advantage of automated financial planning platforms lies in their ability to remove emotional bias from investment execution. During periods of market volatility or localized sector realignments, automated algorithms systematically rebalance portfolios back to target asset allocations without falling victim to panic selling or speculative enthusiasm. Furthermore, integrated cash-flow monitoring algorithms analyze individual spending patterns in real time, automatically sweeping surplus income into designated retirement or debt-liquidation accounts to accelerate net worth accumulation.

Despite these operational advantages, algorithmic tools have inherent structural limitations when addressing complex, highly personalized financial life events. Decisions involving multi-generational estate planning, highly complex tax strategies, small business exits, or nuanced real estate transactions require contextual human judgment that software models cannot replicate. Relying solely on automated models without periodic human professional review can result in misaligned risk profiles or overlooked tax liabilities during major life transitions.

The optimal approach for personal financial planning in late 2026 is a hybrid advisory model. Individuals should utilize automated platforms for routine asset allocation, continuous tax optimization, and low-cost passive index tracking, while engaging qualified human financial advisors for periodic strategic planning, estate structuring, and qualitative risk evaluations. This dual approach ensures maximum cost efficiency and disciplined execution while retaining essential strategic guidance.

Personal Finance

High-Yield Optimization: Structuring Personal Cash Reserves in a Sustained Rate Environment

Published

4 days ago

July 20, 2026

Business Finance News

Structuring Personal Cash Reserves in a Sustained Rate Environment

In the financial environment of mid-2026, personal cash management has re-emerged as a vital component of holistic wealth building. With central bank policy rates holding firm to maintain long-term price stability, yield-bearing instruments such as money market funds, high-yield savings accounts (HYSAs), and short-term Treasury bills continue to offer compounding returns around 4% to 5%. For individual investors, effectively structuring cash reserves requires shifting away from passive bank deposits toward active yield optimization.

A frequent pitfall in personal asset management is leaving substantial liquid capital in traditional checking or low-yield savings accounts, where real returns are continuously eroded by baseline inflation. By implementing a disciplined ‘cash ladder’ strategy—allocating liquid funds across tiered maturities using ultra-short Treasury instruments and FDIC-insured high-yield accounts—individuals can secure maximal yields while retaining immediate liquidity for emergency expenses or tactical investment opportunities.

Simultaneously, investors must evaluate the tax efficiency of their cash holdings based on their tax bracket and geographic location. For high earners situated in states with high local income taxes, direct holdings in short-term U.S. Treasury bills often yield a higher net post-tax return than standard high-yield savings accounts, as Treasury interest is strictly exempt from state and local taxation. Understanding these nuanced tax distinctions allows individuals to capture significant incremental gains without taking on additional market risk.

Ultimately, personal financial health in late 2026 hinges on intentional liquidity management. Cash reserves should not be viewed merely as static emergency funds, but as a dynamic asset class that contributes positively to net worth growth. Regularly auditing yield terms, automating cash transfers, and optimizing for post-tax efficiency ensures that personal capital remains fully productive across all economic conditions.