Calling all work-at-home business owners!

Deductible business expense?

Work clothes- to wear while working at home?

I wish but “no” they are not! I hope that wasn’t a trick question.

Money Monday- let’s talk deductible expenses. You don’t need to go another year wondering!

Long story short- business expenses are those ‘wholly and exclusively incurred in the production of income.’

It’s true that you can deduct the amount you spend on work clothes BUT this can get a little confusing if you are like me and work at home. Your work clothes must meet the following requirements before you can deduct them on your Schedule C:

1- you just wear them as a condition of your employment.

2- the clothes cannot be suitable for everyday wear. Busted! I totally live in my athletic wear and wear it everywhere!

Okay, so mine aren’t deductible but are yours? For deductible business clothes, think safety shoes/boots, safety glasses, hard hats, work gloves-

Think uniforms that are distinctive to the business with a company logo but NOT the khaki pants that are worn with it-

Think promotional attire! This includes the clothing as well as the cost to add your logo.

These are all deductible!

Think costumes, many musicians and entertainers can deduct their theatrical clothing if it’s not suitable for everyday wear.

A Las Vegas showgirl was audited after claiming her costumes as tax deductions. She was told that because she could wear them outside of performances they weren’t deductible.

To prove her point she came to the audit in a costume and couldn’t sit down due to the shape, and won! I know it stinks- I don’t make the rules I just want you to know them! Make sure your books are legit and you’re not taking deductions the IRS won’t allow. Need help? That’s what we do!  Did you know I give free calls!  Schedule a time on my calendar and we’ll chat!