Is Work Clothing Deductible?

Summary: Wondering whether you can take a deduction for the clothing you wear as a small-business owner? The answer isn’t simple. The IRS has strict rules on clothing deductions. Click through before you buy that Armani suit on the company’s dime.

Can you deduct clothes as a business expense? In some cases, you can deduct the amount you spent on the purchase and upkeep of work clothes. First, however, you must check that your purchase meets two requirements:

• You must wear it as a condition of your employment.
• The clothes cannot be suitable for everyday wear.

For example, imagine you’re a nurse purchasing a set of scrubs. You wouldn’t want to wear your scrubs when you go out to dinner. Other people would identify you as a member of the health care field. This is clothing you can deduct.

There are also professional clowns and Elvis impersonators who probably have a good case for deducting their workwear. The most famous example was the celebrity Dinah Shore, who deducted the cost of the formal dresses she wore on her television show because she argued they were too tight for her to sit down in and therefore could only be worn on set. The deduction was allowed, but rumor has it that the IRS sent a judge to confirm her claim about their tightness.

What about buying a designer-label suit to look professional when you’re giving a presentation at a marketing meeting? That suit’s probably not deductible. If you could wear the same suit on a dinner date without eliciting comments, it doesn’t qualify as an expense.

Essential for the job

How about protective clothing worn on the job — safety glasses, hard hats and work gloves? Yes, they can be deducted. List your profession on your return if it’s a job that requires personal protective equipment.

If you are wearing protective clothing on the job, include the clothing costs on your tax return. Work clothes are among the miscellaneous deductions that are only deductible to the extent that the total exceeds 2% of your adjusted gross income.

Add all the deductions in this category together — they should include other deductions like work-related travel, work tools and professional journals — and subtract 2% of your adjusted gross income. This is the amount you can deduct.

The rules on when to deduct the cost of work clothing can be confusing. Most military uniforms can be worn when the owner is off duty and so are not guaranteed a deduction. If you receive a clothing allowance or other type of reimbursement, you must reduce your deductible expense by the amount of allowance you get.

As you can see, there are a lot of subtleties you must consider in deciding what may or may not be deductible, and your final call can have a lot to do with your specific situation. Check with a tax professional so that you don’t inadvertently violate IRS rules — or leave money on the table.

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