Work clothes are tax deductible if your employer requires you to wear them 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. You can fully deduct small tools with a useful life of less than one year. Deduct them the year you buy them.
However, if the tools have a useful life of more than one year, you must depreciate them. You can usually depreciate tools over a seven-year recovery period or use the Section expense deduction.
Under Section , you can expense the full cost of a tool the year you place it in service. The IRS provides detailed guidelines to help taxpayers understand when clothing is deductible as a business expense. The IRS requires that deductible business expenses be ordinary and necessary.
Ordinary expenses are those that are common to your type of business. Necessary expenses are those that are appropriate and helpful to your business.
To be deductible, uniforms and special business attire must be commonly worn in similar businesses and must be necessary to the operation of the business, such as for safety or recognition. The same "ordinary and necessary" requirement applies to unreimbursed expenses claimed by employees. Business deductions are allowed for purchasing and maintaining uniforms and work clothes that are required by the employer and that are not appropriate for everyday use.
Examples of people who wear uniforms that are not worn for occasions other than work are mail carriers and law enforcement and transportation workers. Certain types of work clothing, such as plain white or blue pants, are not distinctive enough to qualify for a business deduction.
The IRS allows a deduction for military uniforms only for reservists who are prohibited from wearing the uniform while not on duty. Clothing that promotes your business is deductible as a promotional expense. This includes the cost of the clothing itself, and the cost of adding your business logo to the item.
You can claim this promotional cost as a miscellaneous deduction on your tax return. The basics of this deduction are fairly straightforward. If you purchase hard hats, boots, or gloves for yourself or your employees, you can deduct the costs. If you produce video content online tutorial videos, an online news broadcast, reviews , you likely invest in clothes to wear in front of the camera.
There was a similar case with a TV news anchor where she tried to deduct clothing costs, because the clothes she purchased followed guidelines set by her employer, the news channel. However, because the clothes were suitable for general wear, they were disqualified from being tax deductible. Attending a trade show is one way to get exposure for your business and to find new customers.
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