MEDIA ALERT - Truth Can Be Stranger Than Fiction, Even in the Tax World

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Wolters Kluwer Tax & Accounting discusses unusual tax provisions, revealing surprising deductions. Items like swimming pools, ransom payments, and even cosmetic surgery can be tax-deductible under certain circumstances. Complex tax laws often lead to unexpected interpretations, emphasizing the importance of consulting tax professionals.

Mark Luscombe, Principal Federal Tax Analyst, highlights that expenses can vary widely based on context. For example, expenses for specialized uniforms for certain professions may be deductible, while items like business suits are generally not.

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• Wolters Kluwer shares are listed on both Euronext Amsterdam (WKL) and the over-the-counter market in the U.S. (WTKWY).
• The company reported annual revenues of €4.6 billion in 2020, showcasing strong market presence.

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• None.

Wolters Kluwer Tax & Accounting takes a look at some of the more unusual tax provisions

Wolters Kluwer:

What: The tax world is a strange place. Did you know swimming pools, ransom payments, and candy bars could be tax deductible?

Tax provisions can be very complex, and that complexity can lead to very unusual distinctions. Quite often a decision in a tax case in court creates a precedent that can survive for many years after. Questions such as “Can that expense be treated as an ordinary and necessary business expense?” and “Is that expense based on a prescription from a physician for a recognized medical condition?” can lead to unexpected outcomes.

Why: When in doubt about the tax treatment of an item of income or expense, always check with your tax return preparer. The answers may often surprise you:

• Cosmetic surgery, while generally not deductible, may be deductible if a taxpayer can demonstrate the procedure increases their income
• While a general work uniform like a business suit is not deductible as a business expense, very specialized uniforms and tools, such as leather clothes, whips, or handcuffs belonging to a person who makes their living as a dominatrix may be deductible
• A swimming pool would not normally be deductible, but a swimming pool prescribed by a doctor for a particular medical condition may be deductible
• Clarinet lessons for a child with an overbite may be deductible as a medical expense
• Food for stray cats in a junk yard may be a deductible business expense for pest control
• Paying ransom to a hacker may be a deductible business expense if a police report is filed and the incident is reported to the SEC
• In a few states, candy bars are taxable or not depending on whether they contain flour
• A petting zoo to entertain children of visiting clients may be a deductible business expense
• At least one state taxes blocks of ice but not ice cubes
• In another state, an unsliced bagel is not taxed but when sliced, toasted, or smeared then it is taxed
• In a third state, pumpkins for decorations are taxed but pumpkins for food are not
• Fostering animals in conjunction with an IRS recognized charity may lead to a qualified charitable contribution for related expenses

Who: Tax expert Mark Luscombe, JD, LL.M, CPA, Principal Federal Tax Analyst at Wolters Kluwer Tax & Accounting, is available to discuss unusual provisions in the tax law and the logic behind them.

PLEASE NOTE: These materials are designed to provide accurate and authoritative information in regard to the subject matter covered. The information is provided with the understanding that Wolters Kluwer Tax & Accounting is not engaged in rendering tax advice or accounting, legal, tax or other professional service.

About Wolters Kluwer

Wolters Kluwer (WKL) is a global leader in professional information, software solutions, and services for the healthcare; tax and accounting; governance, risk and compliance; and legal and regulatory sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with advanced technology and services.

Wolters Kluwer reported 2020 annual revenues of €4.6 billion. The group serves customers in over 180 countries, maintains operations in over 40 countries, and employs approximately 19,200 people worldwide. The company is headquartered in Alphen aan den Rijn, the Netherlands.

Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt (ADR) program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

For more information, visit www.wolterskluwer.com, and follow us on Twitter, Facebook, LinkedIn, and YouTube.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220426006171/en/

KELLY DE CASTRO

Wolters Kluwer Tax & Accounting

+1 614-288-5640

kelly.decastro@wolterskluwer.com

Source: Wolters Kluwer Tax & Accounting

FAQ

What are some unusual tax deductions mentioned by WTKWY?

Some unusual tax deductions include swimming pools prescribed by a doctor, ransom payments to hackers, and specialized uniforms for certain professions.

Who is the tax expert discussing these provisions for WTKWY?

The tax expert is Mark Luscombe, Principal Federal Tax Analyst at Wolters Kluwer Tax & Accounting.

How much revenue did Wolters Kluwer report in 2020?

Wolters Kluwer reported annual revenues of €4.6 billion in 2020.

Where are Wolters Kluwer shares traded in the U.S.?

Wolters Kluwer shares are traded on the over-the-counter market in the U.S. under the symbol WTKWY.

What is the significance of unusual tax provisions for businesses?

Unusual tax provisions can lead to unexpected deductions, impacting businesses' financial strategies and tax liabilities.