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SALT LAKE CITY — The tax deadline is less than a week away. Anybody who still needs to file their return should know there are some weird things they might need to claim as income.
Let's take a look back at the days of Al Capone. He was eventually taken down by not paying taxes on his illegally gotten gains.
That rule still applies today. Even if you get money in an illegal way, the IRS still requires you claim it as income on your taxes. Liberty Tax Service franchise owner Margie Broschinsky says a woman recently came into her business and asked if she needed to claim the $2,000 she made selling cocaine.
"Since she told us about it, she is required to claim it. So, we had to put it on there under ‘drug dealing.' That was a first for me," Broschinsky said.
She wasn't sure what she should do with this information. So, she called the IRS and they instructed her where to put it in this woman's file. The words "dealing cocaine" are literally on that customer's tax return. (Broschinsky says the IRS told her that her client should expect a call from the proper authorities.)
Another thing you have to claim as income is panhandling money, even though most people who beg for money on the street live below the poverty line. Broschinsky had a client whose only source of funding was panhandling.
"Not only does she not have to pay any money [in taxes], but she actually got a fairly significant refund because she qualified for the earned income credit and a number of other credits because she has kids," Broschinsky explained.
Plus, if you find some sort of valuable antique stored in your attic, it has to be claimed as income even if you haven't received any money for it. Broschinsky says the IRS has people watching shows like "Antique Roadshow," looking for people who suddenly find themselves in possession of something valuable.
But, along with all the sources of income people must claim, there are several things they can write off as an expense. For instance, if you make modifications to your body in an effort to boost your income, you can expense the costs.
"If you're a tattoo artist and you get tattoos on your own body, then, in essence, you're sort of a walking billboard for your business," Broschinsky said. "So, you could likely expense those tattoos."
Plus, people can expense medications and procedures a doctor prescribes.
"If they've been diagnosed, for example, with a gender identity disorder, then they could legitimately take an expense to have a sex change," Broschinsky said.
