Lessons from the Tax Court: Clothing deduction dressed down

Can you deduct the cost of fancy clothing you must wear to company events? Gen­erally, the answer is “no.”

Deductions for work clothes are permitted only if the following two conditions are met:

  • You must wear the clothes as a condition of employment
  • The clothes aren’t suitable for everyday wear.

Note that you must meet both of these requirements. If you fail either one, you can’t deduct the cost or upkeep expenses.

New case: Ms. Miller, an account executive for a public relations firm, had to dress up for certain company events. The firm specified the style and color of clothing that its employees were expected to wear to these events. But employees weren’t required to display a company logo or any other distinctive marking on their clothing.

Miller bought three black evening dresses to wear to company events in 2009, but she conceded that the attire was also suitable for personal wear. Result: She isn’t entitled to deduct the cost of these items. (Miller, TC Summary Opinion 2014-74)

Book of Company Policies D

The IRS provides some specific examples of workers who may be able to deduct the cost and upkeep of clothes used for work, including clothes for delivery workers, firefighters, health care workers, law enforcement officers, letter carriers, professional athletes, and transportation workers (air, rail, bus, etc.) Also, musicians and entertainers may deduct expenses for theatrical clothing and accessories if these items are not suitable for everyday wear.

Tip: You can deduct the cost of protective clothing required in your work, such as safety shoes or boots, safety glasses, hard hats and work gloves.