As a business owner, you may be wondering if you can write off clothing as a business expense. After all, you need to dress professionally to make a good impression on clients, attend meetings, and network with fellow professionals. However, the IRS has specific rules about what types of clothing are deductible and under what circumstances. In this article, we will explore the ins and outs of writing off clothing expenses for your business.
Before we dive into the details, let’s define what constitutes a business expense. According to the IRS, a business expense must be both ordinary and necessary. This means that it must be common and accepted in your industry and helpful and appropriate for your business. Clothing expenses can fall under this definition if they meet specific criteria, which we will discuss below.
What Types of Clothing are Deductible?
The IRS distinguishes between two types of clothing: everyday wear and specialized clothing. Everyday wear is clothing that you could wear outside of work, such as suits, dresses, and shoes. Specialized clothing is clothing that is necessary for your job but is not suitable for everyday wear, such as a uniform or protective gear.
Everyday wear clothing is generally not deductible, even if you only wear it for work. However, there are a few exceptions to this rule:
- Clothing with a company logo – If you wear clothing with a company logo that is required by your employer or is necessary for your business, it may be deductible. For example, if you are a salesperson and wear a polo shirt with your company’s logo on it when meeting with clients, the cost of the shirt may be deductible.
- Clothing that is not suitable for everyday wear – If you need to wear clothing that is not suitable for everyday wear, such as a costume for a theatrical performance, it may be deductible.
- Clothing that is required by law – If you are required by law to wear certain clothing, such as a hard hat or safety shoes, the cost of that clothing may be deductible.
How to Deduct Clothing Expenses
If you meet the criteria for deducting clothing expenses, you can deduct them on your tax return. However, there are a few rules you need to follow:
- You must keep detailed records of your clothing expenses, including receipts and invoices.
- You cannot deduct clothing expenses if you are reimbursed by your employer or if the expense is considered a personal expense.
- The total amount of your clothing expenses, along with other miscellaneous expenses, must be more than 2% of your adjusted gross income to be deductible.
In conclusion, it is possible to write off clothing as a business expense if it meets specific criteria. Everyday wear clothing is generally not deductible, but there are a few exceptions. If you do meet the criteria, be sure to keep detailed records and follow the rules for deducting clothing expenses. As always, it’s a good idea to consult with a tax professional to ensure that you are following the IRS guidelines correctly.