Tax Rules on Deducting Work Clothing
We have received a lot of questions about the tax deductibility of work clothing under the new tax law, the Tax Cuts and Jobs Act, TCJA, tax reform or otherwise known as the “Trump Tax Law.”
When the law took effect, there were some changes that were made to the deductibility of the work clothing. Previously, under the tax law, work clothing was defined as…
Clothing that your employer requires you to wear everyday but they cannot be worn as everyday wear, such as a uniform. However, if your employer requires you to wear suits- which can be worn as everyday wear- you cannot deduct their cost even if you never wear the suits outside of work. If the clothing had a company logo, such as a uniform, then you could deduct the cost of the uniforms and their upkeep.
This deduction was also available if your employer didn’t reimburse you, in excess of 2% of your adjusted gross income (AGI) on your schedule A of your personal Tax Return (Form 1040).
Under the new tax law, individuals can no longer take these deductions as these types of miscellaneous deductions have been suspended under the TCJA, as noted in IRS Tax Report Tax Tip 2018-176, November 14, 2018.
However, if you are someone who is a business owner, you have the ability to deduct clothing for business if you have the following criteria…
- The clothing has your company logo that is clearly visible
- The logo on the clothing has to be permanently affixed, meaning it cannot be easily removed or rubbed off like a sticker of a washable marker.
The above criteria are important because if it meets the criteria, this is not a clothing deduction, but considered advertising. Recently, we had a client audited for their advertising expenses and one item in particular that was an item of interest was a pair of Nike Shoes that the client wrote off.
What the IRS didn’t realize was that the Nike Shoes were a customized pair of LeBron James signature shoes! We had our client wear the shoes to the audit with their company logo that was permanently affixed and the client kept their receipts of their purchase with Foot Locker and a local artist with the accurate description of the service that tied to the shoes. With the evidence and the receipts, the client was able to pass the IRS Audit with flying colors and did it in style!
If you have any questions or concerns on the deductibility of clothing or any other expense on your tax return, please don’t hesitate to contact us! We’re here to help you make your money work for you!