When Can Work Clothes be Legally Written Off? (100% Tax-Free)
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- Опубликовано: 30 ноя 2024
- Learn how to legally write off work clothing for your business, what can and can’t be written off, and what are the deciding factors to determine whether certain clothing is a business expense. Knowing this can help you leverage tax law and use it to your advantage when wanting to save on taxes for your business.
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ABOUT JASMINE DILUCCI, JD, CPA, EA
Jasmine DiLucci has specialized in tax since high school when she first became licensed to represent taxpayers before the IRS.
Now as a tax attorney and CPA, she works with individuals and business owners across the nation to on Tax Planning, CFO Advisory, and IRS Tax Resolution
How Jasmine Got Here…
18: Became an Enrolled Agent, licensed to represent taxpayers before the IRS.
22: Earned an Accounting Degree and a Master’s in Finance.
23: Became a CPA
24: Stepped into leadership as she took over her own CPA firm
26-28: Juggled full-time studies at SMU Law while she was growing her CPA firm.
28: Graduated from law school 4th in her class and became an Attorney, all while managing her CPA firm.
29-31: Expanded her CPA firm to seven figures, with a focus on delivering top-notch service and exceptional value to every client.
32: Launched Tax Leverage to offer free online education and combat the rise of “tax gurus,” aiming to provide real, accessible tax knowledge.
Today: She’s dedicated to running her firm and leveraging her expertise to educate and empower others, helping individuals and businesses navigate the complexities of taxes and finance.
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Disclaimer: This information on this channel is for educational purposes only and does not constitute professional legal or tax advice.
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I started an LLC, single vehicle freight company so small. This video helps answer some of my questions for buying shirts, pants, work boots, PPE, etc. Good video.
Fellow attorney here. Only tax channel I can tolerate hearing from.
love it!
By far the best tax experts in RUclips. But either the RUclips algorithm is failing or people like to be fed a narrative that aligns with their hopes
Not a lot of views for all the subscriptions.
She’s not saying what ppl want to but what we really need to hear ❤ the best
It is easy to hear things - even things I don't necessarily want to hear - when the person saying them has such a nice personality and such a great looking face. Also, Jasmine explains things so clearly and thoroughly, and those are valuable attributes to have when speaking about things of a potentially complex and subjective nature.
Totally agree!
My father was an Episcopal priest. I remember him saying that he could write off clergy shirts.
Tax laws can be so complex, and it’s super helpful to break them down like this. Understanding how different policies can impact our finances is crucial for making informed decisions.
Making profitable investments during this time of political change can be risky without that insight. For me, working with an adviser is the best first step to navigate these complexities and make informed choices.
Making profitable investments during this time of political change can be risky without that insight. For me, working with an adviser is the best first step to navigate these complexities and make informed choices.
You asked for topics - here's one: Interest on Schedule C. Scenario - someone spends $100,000 to become a Commercial Pilot. This is a new career, so the training costs are not deductible. If the pilot borrowed the $100,000 (15 years at 16% these days) and is paid on a 1099 is the loan *interest* an expense on Schedule C?
Enjoy your work, and appreciate your expertise.
Thank you!
Thank you for making this and sharing it!
What about in construction? Like most of my work wear is something I could wear on off days for personal use except that it’s filthy. I’m a paver so there’s oil and diesel and other substances on my work clothes I don’t wear them for personal use outside of work.
Even if you are allowed to deduct your clothes you still need enough itemized deductions to make it worthwhile. Many people will still be better off taking the standard deduction.
This video is in reference to business deductions on a Schedule C.
What about construction field? Carpenter pants, steel toe boots, etc?
I have the same question I could technically wear my work clothes for personal use but they’re so beat up and dirty that I have different clothes for personal use.
I have the same question. HnR block told me no but I beg to differ. After one or two uses they are torn or stained. While boots may be usable as shoes why would I wear steal toe boots to movies? I’m assuming it’s a write off for employee or owner
@@geneshort8160as an employee, no way you can write these items off, they’re not business expenses
CPA here. Steel toe boots would seem to fall under the same category as scrubs. Not usually worn or suitable for non-work. Therefore, likely to be ok to deduct.
I’m a dentist. Obviously scrubs are deductible. My footwear though able to be worn outside of work, I change to the office sneakers. My reasoning for the tax deduction is from OSHA. They mandate that what is worn in the office should not be tracked outside. Does this “hold mustard?”
possibly but not likely. the best way to ensure this is to wear normal shoes to work. change into the slip resistant shoes at work and take them off before you go home. (never, ever, ever wear them anywhere but the office) if you are wearing them when you leave work then no...they will not be tax deductible. most people do not realize that many shoes that are slip resistant are worn normally. to be real sure. you should only buy OSHA approved slip resistant footwear. so...don't get the slip on Crocs...wear them from home to Starbucks...then to work...then go to the grocery store on your way home. Once you do this...boom.. any possible tax deduction is gone.
2:30 Actually, the IRS doesn’t have to follow the decisions of the Tax Court. Unless, the IRS acquiesces to the decision, the IRS is only bound by Appellate decisions in your federal circuit and Supreme Court decisions. In general, the IRS only must follow the Internal Revenue Code and Treasury Regulations. Furthermore, most Tax Court opinions are not binding on the IRS and are generally only binding between the taxpayer and the IRS with regard to the facts and circumstances of that case.
However, the IRS Chief Counsel’s Office must weigh the hazards of litigation before deciding to rule unfavorably in an Appeals proceeding. Accordingly, it is at that point which the IRS may decide to settle based on the strength of the Tax Court case relied upon for the tax position taken.
what are your credentials
@@lol-zt7gp Will the OP's credentials change the validity (or invalidity) of the argument? If there is a flaw (or flaws), what is (are) it (they)?
Beautiful, intelligent and graceful.
I've worked at a company for 10 years and I purchased thousands of dollars in tools over the years. Can I write it off, tax deduction? I have receipts. Should my employer reimburse me?
Awesome video, thank you!
Work boots that have steel toe or composite toe... should be work clothing write off.
Not if you're an accountant or stock broker. But yes clothing that serves a safety function if your job has relevant potential dangers that are mitigated from that clothing are probably an allowable deduction.
Oh so something like a bee suit or welding equipment is deductible, but not other clothes / jewelry. That makes sense I thought a lot of those youtube shorts where they try to teach you "magic" deductions they made up were fake.
Great video! Thank you
Would a federal employee (let’s say special agent for the FBI) be able to write off suits since the “required dress code” for male and female agents is traditional black pants, coat, and tie?
No
No logos. But nonslip/steel toe shoes. If i wear those while im not working I am wearing out the integrity of those shoes for nothing. What about tools like kitchen knives or bartending equipment? All of that needs to be black and prestige condition. No scuffs no damage so, using that in my personal life is putting more cost on me. So i don’t use it unless im working. Also the same side hustle requires me to wear a tie and sometimes some crazy fancy pants stuff I have no use for in my personal life so i rent it. Like a penguin tux or some kind of costume. Does that fall under the category of being claimed on my taxes?
The third test, as written, doesn't make sense: "the clothing is not so work personally" ??
Can't be used for personal use. Listen. She explained it.
haha thanks for catching the typo - "worn" not "work" - it cannot be worn personally
As a wildland firefighter, the pants and shirt that I am required to have, as per federal and state regulations, are very expensive and highly specialized, being made of Nomex, a flame-proof synthetic fabric. These garments must be worn any time I am on the line or go to the line, or whenever and wherever the Safety Officer says they must be worn. So I should be able to write them off, right? But, although they are rather distinctive looking, I COULD wear them when I am not working on a forest fire. I mean I would look a little odd in those clothes out shopping or sitting at church, but functionally there is nothing about them that makes them unfit for everyday use - there is no logo or anything like that on them. So that means that I could wear them for personal use, which makes them ineligible for a deduction. Is this correct? I mean it seems wrong, but according to the letter of the law, this is what you seem to be saying, that I can not deduct my firefighter's flame-proof clothing.
I've been an industrial plumber for 14 years now, and the only pieces of clothing that I've purchased in that time that would fit the "not fit for personal use" qualifier would be hardhats, and maybe fall restraint harnesses(but I've definitely used those for personal non work related things and I think they're very fit for those activities).
Even the thickest welding leathers are suitable for general/non-work related use. and everyone who's ever bought welding leathers has used them for non welding or work related things.
so your pants and shirt aren't tax deductible as clothing(and I think there is virtually no clothing that can be really tax deductible expenses with these rules) but they are personal protective equipment, which is a different deductible expense category from clothing.
I'm also a tax attorney so I'll help you out. First, are classified as an employee or independent contractor? If you are an employee, the TCJA got rid of unreimbursed employee expenses, so these cannot be deducted by employees. However, if you are not classified as an employee, for example you are an independent contractor, then you can potentially deduct these.
Clothing can be tricky as you noted. The rule is meant to prevent someone like myself, an attorney, from deducting expensive suits as "work clothes." At the other extreme would be a hazmat suit, which clearly can't be worn outside of work. What about an educator who must wear a polo shirt with the school logo on it? Kind of a gray area, but it would not be odd to wear a polo with a school logo out in public - some people buy these just to show school spirit. In your situation, I would say that because of the specialized nature of the clothing - it's fireproof - and the fact that the clothing is somewhat like a uniform in that you would look "odd" wearing it outside of work, you can take the deduction.
@@MikeXCSkier thank you, Mike. I am an employee, so I guess that means I can't deduct my firefighting clothes or personal protective equipment. By the way, you use an acronym, TCJA ..... what does that mean?
@@TomReichner TCJA = Tax Cuts and Jobs Act. It's the official name of Trump's tax plan which is still in effect. Here is the current rule for employee expenses:
You can no longer claim a deduction for unreimbursed employee expenses unless you fall into one of the following categories of employment, or have certain qualified educator expenses.
Armed Forces reservists.
Qualified performing artists.
Fee-basis state or local government officials.
Employees with impairment-related work expenses.
Feel free to ask me more questions. You place your life on the line so I'm always willing to help out a first responder.
You are incredible! Thanks...
Thanks!
Realistically though, how would the IRS be able to prove that you did or didn't follow the law correctly? You could buy a piece of clothing with a logo but then lets say its stained and you get rid of it. If burden of proof is on the tax payer then how would you prove it was not suitable for personal use.
Receipts
What about PPE like mandatory steel toe shoes or eye protection?? Is that deductible
Wouldn’t a logo on personal be for advertising your business?
As an employee could I deduct the cleaning if my my uniform?
I do construction. My clothes get tore up, covered in drywall dust, insulation, paint, etc... with how fast I can destroy my work clothes and shoes, is there a case that these clothes can be deducted?
Put a logo on the clothes as advertising
So, I am always wondering about my work clothes. I own my company and I have to wear flame retardant clothing as it’s required for safety purposes and cannot work without it (safety guys will fine you or force you off a work site). While I suppose I can use it out, it looks decent as a lot of it is Ariat flame retardant clothing, I don’t really want to wear it out as it’s not comfortable. However, I was told I cannot deduct it, even though it’s safety wear that my job requires because it looks too normal. But then I feel like I have to buy outrageously uncomfortable and ugly clothing if I want to have it be tax deductible… it didn’t make sense to me.
So as a contractor my clothes are used exclusively for work and not worn otherwise because of the nature of my field they get gross and worn out quickly means I can write them off right?
So scrubs are deductible since it is not suitable for personal use and it is required for the job.
Yes scrubs are not considered suitable for personal use. The biggest reason Tax Court will step in and add tests like this one is to avoid abuse of the tax law, not actually to prevent deducting the purchase of clothes that are necessary for the job.
well good to know...I would risk just writing it all off in the GL line and let the CPA decide.
What most people do! I will say that when the audit rolls around the CPA will be looking at you like "well...you told me it was uniforms" 😆
Are your services available for the state of Florida for business and personal?
Yes I work with people in all states - taxleverage.com
What is you say fancy clothes and accessories is part of your uniform ?
You can still use the fancy clothes and accessories outside of work, so no.
@@jamesodell3064 you can wear any clothes outside of work
What about clothes with logo Large and used as advertising?
Yes
If its the fashion of a clothing company making the video the clothes are already listed elsewhere in taxes.
If you make videos and have costumes/stock clothes you can write them off. IF YOU CANT USE THEM. Clothing that is obviously to small or large for you that only models use durring shoots would be deductible.
There is a whole system of renting or borrowing clothing for videos. The IRS knows this. Going in and saying you only hire models with a certain look and size rhat match the owners and then claiming it required you buy the clothes will get you slapped hard and with intent by the IRS.
The first thing to presume is that the agent doing your in person audit has had at least 4 hours of time to search the internet on your industry.
Each line of your 1040 will be searched online.
I spend 15min researching production clothing online do you think you convince me it passes the rules?
Hell, I spent the 90s in underground clubs where women I knew would show up wearing clothe that were just black electrical tape. Im a 6' tall man and had a turtleneck one piece pull over jacket made of clear vynal made inspired by the Blade Runner shoit of the woman crashing through plate glass windows.
Now convince me you cant wears something 2 sizes smaller or larger than you made for the oposite gender to go to a superbowl party.
Could close that bare your company's logo be written off as advertising if you give them away to clients for free?
The taxpayers tend to win the deduction where the clothing had a logo. I wouldn't expect the same result if the logo were purposefully hidden on a luxury item like a louis vuitton bag with a logo on the inner seam. Clothing given to clients for free would fall under a gift and those have limitations of $25 per person to be deductible.
I cant even expense work boots and i own a construction business
Hey Jasmine, can I throw you a curveball? My most recent purchases were velcro patches with the company logo. I did it to be able to swap between different clothes and backpacks. The patches should be deductible but not any clothes, right?
I have an issue with the 3rd requirement. I've deducted all of my work clothing almost my entire career. My mechanic's pants & shirts, steel toed shoes and welding leathers, protective eye wear, etc. ALL of those items CAN be worn for personal use outside of the work environment. But, they are not generally fashionable to wear for everyday occasions.
Though, this deduction was made useless under the first Trump administration.
Oh wait scrubs ARE deductible??!!
Audio would be better if you folded the Blue Yeti microphone up so that its face faces you instead of the tip.
How can we ever know what is legal or not legal? Lawyers will always feed you a disclaimer of their “attempt” to provide you the “best legal advice.” “Your results may vary.”
We can have this law tax expert give us advice but then have the IRS law tax experts say she is wrong. Then they both go to court to argue their side as to how they interpreted the law. The IRS always wins.
IRS actually gives in on a lot of arguments. In an IRS audit, the lower level auditor will just go down the checklist and you often lose, but then in IRS Appeals and especially IRS Tax Counsel, they tend to be a lot more reasonable. IRS Counsel's #1 priority is settling the case so it doesn't go to Tax Court, so they compromise if you have a good argument, and even give in if you've got clear tax law cited. They view it as a risk to go to Tax Court and it takes up valuable time on the docket for other cases, so they will often settle even if the argument isn't perfect.
@@taxleverage
Good to know. Appreciate the info.
Does the state tax board do the same? Any experience with CA?
@@bdog0720 States are harder to work with, especially California. You should still be good if you’ve got a solid legal position, but if not then it’s more difficult than the IRS. The IRS is very overloaded and understaffed. CA really needs to tax money and has more staff compared to the population vs the IRS
@@taxleverage
Thank you.
What about where the clothes are used in a production of fashion videos ala vivacious honey.
Nope.
If it's the equivalent of a costume. Then yes. The simple question is would a normal person under normal circumstances wear it?
Grocery store, taking the kids hiking?
Better chance of a construction worker writing off safety pink shirts than someone writing off an expensive suit.
People running trillion dollar companies don't write off their clothes, so how can any of the 200,000 people under them consider them necessary????
In construction, it's steel toe boots, and that's it. My glasses are safety rated, but I don't take them off for another pair at the end of the day because they don't function in my personal life.
Really, it would an IRS employee consider it normal attire after being trained by the IRS to do audits.
IRS employees are going to be more conservative than the law requires. 99% of the time, people don't appeal that judgment through 2 layers of the IRS to get the tax court to overrule them.
@@sparksmcgee6641 you should be able to write of the delta between the cost of normal glasses and the safety rated?
'For like..."