Maximizing Work Clothes as Tax Deductions:
Introduction:
Navigating the intricacies of tax deductions can be challenging, especially when it comes to work-related expenses like clothing. In this guide, TurboTax experts provide insights into using work clothes as tax deductions, highlighting key steps and considerations for individuals looking to optimize their tax returns.
Overview:
Let’s address some common misconceptions about claiming deductions for work clothes. While it may seem logical to deduct expenses for job-specific attire, the Internal Revenue Service (IRS) imposes specific criteria for eligibility. Work clothes that can also serve as everyday wear are generally not deductible. For a clothing expense to qualify, it must be both mandatory for the job and unsuitable for regular wear.
Identifying Necessary Work Clothes:
It is important to determine if work clothes are mandatory for the job. Your employer must require that the clothing be worn for the position. Also, the clothing item cannot be able to be worn in everyday settings that are not your work.
An example would be a white work shirt. It can be required by the employer but it would not be deductible due to its ability to be worn in non work situations.
Documenting Employer Policies
Keep a record of the employer policy requiring the clothing item. This becomes critical if the IRS questions the deduction.
Receipts and Documentation
Receipts should always be saved for items that are being deducted. You should have proof of how much you paid for the clothing item. It would also be a good idea to keep up with receipts for maintenance such as dry cleaning costs.
Claiming the Deduction
Employees should include clothing costs under “miscellaneous itemized deductions on the Schedule A. This category is subject to 2% threshold of gross income.
IMPORTANT
Beginning in 2018, unreimbursed employee expenses are generally no longer eligible for federal tax deductions. However, some states, like California, may still allow deductions on state tax returns.
Additional Resources:
Can I Claim My Expenses as Miscellaneous Itemized Deductions on Schedule A?