I often hear from clients that they had to buy special clothes – could be a business suit for interviewing, or nice pants/shirts/shoes, etc., that they only wear at work. They want to deduct these costs as business expenses; taking advantage of whatever clothing tax deduction that is allowable by the IRS. Most of the time, these deductions are not allowed. Why? Because the IRS only allows deductions for clothing that is required by the employer and is not something you would be able to wear for other occasions. Whether or not you would wear a business suit and tie anywhere but work is beside the point.
Clothing Tax Deduction Guidelines
What are safe clothing and uniform deductions then? Some of the items that IRS has allowed include:
- Shirts and other items with the company logo. Apparently if there is a company logo on your shirt, the IRS considers it to not be suitable for wear outside of work. This would only be deductible if you bought the shirt and you are required to wear it to work.
- Safety shoes, safety glasses, and other clothing that is protective and required for work.
- Medical lab coats, scrubs, and uniforms required for work.
What types of clothing are probably not allowed to be deducted?
- Dress shoes that you “only wear for work.”
- Business suit purchased just for job interviews.
- Clothing that is required by your employer but does not have the company logo and/or your name stitched/imprinted on it.
- Performance outfits for dance, skating, triathlons, etc. if you are not earning money at these events as a professional.
What are the gray areas?
- If you are a fitness instructor, you may be able to deduct your fitness wear. The IRS could argue that, for example, yoga pants can be worn just about anywhere and are therefore not deductible. It would be better if your employer has a policy requiring certain clothing that has the gym logo on it.
- Shoes you wear in your medical practice and nowhere else because of the stuff that could be on them. Again, your employer’s policy requiring you to have designated shoes for work only would be helpful to support the deduction.
So in summary, the IRS has established strict guidelines regarding business deductions for clothing.
- The clothing must be required for work, and this should be either apparent or (preferably) documented in the employee handbook.
- The clothing must be unsuitable for wear outside of work, and this can be accomplished by sewing the company logo on the clothing.