When Work Clothing is Deductible

Taxpayers often assume that clothing purchased for work qualifies as a tax deduction. The tax law takes a much narrower view.

As a general rule, the IRS does not allow a deduction for work clothing if it serves as everyday streetwear. This rule applies even when a taxpayer buys the clothing solely for work and never wears it outside the job.

Business suits, skirts, dresses, and other professional attire do not qualify for a deduction. Casual work clothing, such as khaki pants, plain shirts, or everyday boots and shoes, also fails the test. The IRS never allows a deduction for watches, regardless of business use.

The law allows deductions only for clothing that clearly does not function as everyday wear.

Required uniforms that identify an employer and lack personal utility qualify for a deduction. Airline pilot uniforms, professional sports uniforms, and required nursing uniforms meet this standard. Protective gear required for safety also qualifies. Electricians may deduct safety shoes that protect against electrical hazards, and truck drivers may deduct insulated coveralls, steel-toed boots, gloves, and safety glasses used exclusively for long-haul work.

Specialized apparel also qualifies when it serves a specific job function and does not adapt to personal use. Hospital scrubs, grease-stained mechanic overalls, and custom performance costumes fall into this category. Promotional clothing may qualify as well when the employer requires it, marks it with a logo, and restricts it to business use.

When clothing qualifies for a deduction, related laundry and dry-cleaning costs qualify too.

Independent contractors may deduct qualifying work clothing on Schedule C as an ordinary and necessary business expense, provided they keep proper records.

Employees face a different rule. The tax law permanently eliminated deductions for employee work clothing. Employees should instead seek reimbursement from their employer.

When an employer reimburses these costs under an accountable plan, the employee receives the payment tax-free, and the employer claims the deduction.

Your next step? Check out our Proactive Tax Strategy & Planning for Business Owners. While you're there, take the 2-minute Tax Strategy Assessment and get some free tax strategy ideas. Or reach out to us to see how we may be of service.

We provide these articles as general information and not individualized tax advice.  They do not constitute a client relationship with you, and any information provided here should be applied at your own risk.