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Dress for tax success

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in Small Business Tax Deduction Strategies

As a small business owner, you frequently incur expenses during the year that qualify for business deductions. But what about the clothing you wear on your back? Typically, you can’t write off the cost of business attire.

Strategy: Check for exceptions. In some cases, you may qualify for deductions if the expenses are properly substantiated.

As evidenced by two new cases, this issue is frequently contested in the courts.

Here’s the whole story: The main rule is that work attire is deductible as a business expense only if these two specific requirements are met:

  1. You must wear the clothes as a condition of your employment
  2. The clothes are not suitable for everyday wear

It’s the second requirement that often knocks taxpayers out of the box.

Despite the track record, taxpayers continue to push the boundaries.

New case 1. A bartender could not deduct the cost of clothing that was required to be worn by employees at a high-end restaurant. The restaurant insisted that he dress fashionably and all in black. However, the attire was still suitable for everyday wear. (Beltifa, TC Summary Opinion 2016-8, 2/18/16)

New case 2. A schoolteacher could not deduct her dresses, skirts, blouses and similar attire because the clothing was suitable for ordinary use. Similarly, the cost of her husband’s boots and heavy work pants were nondeductible. And the husband failed to substantiate costs of work shirts embroidered with his employer’s logo. (Garcia, TC Memo 2016-21)

Tip: When clothing qualifies for deductions, you can also write off laundry expenses and other upkeep.

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