Is That Horse Tax Deductible?

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4 years ago

Outrageous attempted tax deductions make for a good laugh, but as frivolous as they seem, in reality, some are not quite so far off base. For example, a horse farm that is properly set-up and used for income producing activity can be deducted. However, a horse farm used purely for one’s own personal entertainment (a hobby) is not deductible. Additionally, many deductions such as vacations, pets, food, and clothing may, or may not, be acceptable tax deductions, based upon the taxpayer’s specific industry of employment and method of reporting (individual, LLC, SCorp, LLP, etc.).

Misrepresentation or erroneous reporting of tax deductions can quickly lead to an IRS audit. A key component that the IRS will look at if an audit is triggered is the separation of business and personal expenses. Keeping thorough, organized, and accurate records is essential for a taxpayer to protect him or herself from additional and unnecessary tax expenditures.

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