Brad, I’ll be speaking at a conference next month and I’d like to buy a new suit before I take the stage. Is this something I’ll be able to expense come tax season?
Ben E.
Champaign, IL
Great question, Ben.
Clothing deductions can be somewhat confusing, which is probably why they’re one of the more frequently rejected deductions out there. Many people are under the false assumption that if they buy an article of clothing specifically for work, they can deduct it on their taxes—unfortunately, it’s not so black and white.
But just because there’s some gray area to sort through does not mean you should avoid deducting clothing expenses on your tax return altogether.
Ask yourself these two questions to be sure your purchases can be claimed as miscellaneous deductions on Schedule A (Form 1040).
Is it necessary to run the business?
Things like hardhats, safety boots, work gloves, and eye protection are easy to classify. They are protective in nature and required to perform a job safely. The IRS is less likely to approve a suit you bought because it is something you can also wear to that wedding you have coming up next month.
Is it distinctive or promotional?
While protective clothing is easy to identify as necessary, many types of uniforms and other work clothes aren’t as obvious. For it to qualify as a deduction, the item needs to be distinctive and not appropriate for everyday wear. An alternative to the suit would be to have custom-made Polos that feature your logo because the cost of producing the shirts as a promotional expense can be deducted. Just remember, if pairing the polo with a pair of khaki pants, the pants would not be deductible because they can easily be worn outside the business.
To hedge against a rejected deduction, be sure to keep solid documentation in the form of receipts and statements. Be prepared to justify your claim and ask yourself if it’s necessary and distinctive.