Dressing for a Deduction: When Clothing Expenses Are Deductible for Your Business
Wouldn’t it be cool if you could consider everyday items you purchase to live as write-offs? Turns out you can! That’s right, according to many influences and tax gurus online, you can just write-off the clothes you purchase as long as you say it's for “the business” (and evidently the IRS does not even care if this is for the business or not!).
The only downside: Literally none of the above is true (turns out you can’t believe everything you hear online).
Now satire aside, the IRS actually does recognize that some clothing items are necessary for business and reasonably deductible, and have outlined the tests they themselves will use in determining whether clothing is personal or a qualified business expense.
Let’s walk through how clothing fits in with business deductions allowed by the IRS and how you can determine whether something qualifies.
Where Clothing Fits Under the Tax Code
Like most business deductions, it all starts with IRC §162(a).
That section allows a deduction for ordinary and necessary expenses paid or incurred in carrying on a trade or business.
However, there’s another important rule that wants to clapback:
IRC §262(a) states that personal, living, and family expenses are not deductible.
Clothing sits right at the intersection of these two rules…so absent any Treasury Regulations on the topic, how do we know what is deductible for clothing?
Most clothing is considered a personal expense, even if you wear it to work. Because of this, the IRS and the courts have developed a bright-line test through case law to determine when clothing crosses the line from personal expense to business deduction. (A bright-line test is basically a legal standard intended to be a clear and objective way to resolve legal questions and guide outcomes, reducing grey-areas/leaving things up to interpretation)
The Court-Established “Bright Line Test”
Tax courts have generally applied a three-part determination as their bright-line test to determine whether clothing qualifies as a business deduction.
Note: All three conditions must be met.
1. The clothing must be required or essential for your work
The clothing must be necessary to perform your job or meet industry standards. Stress on the word “necessary” here.
Examples could include:
Protective gear required on job sites
Uniforms required by an employer
Specialty costumes or theatrical clothing for performers
Simply wanting to look professional does not satisfy this test.
2. The clothing must not be suitable for everyday wear
This is arguably the most important test cause it generally ends up being the most frequently rationalized when people are trying to make the case that a personal clothing item should be deductible.
Given the abuse on this test, courts apply an objective standard, meaning they ask:
Would the average person consider this clothing suitable for normal/casual street wear?
Your personal habits or preferences don’t matter. So if you’re asking yourself “Would I typically wear this clothing item?”, you are asking the wrong question. They want objectivity, not subjectivity.
If the clothing could reasonably be worn outside work in everyday life, the IRS considers it personal clothing.
3. The clothing must not actually be worn personally
Even if the clothing passes the first two tests, the deduction can fail if you also wear it casually outside work.
For example:
Wearing a uniform only while performing services -> potentially deductible
Wearing the same clothing on weekends (not sure why you would, but the IRS/Courts have thought of this just in case) -> not deductible
Examples of Clothing That May Be Deductible
Now if we put all of the above into practice, we can start to identify the types of clothing that tend to pass all three tests. These generally fall into a few categories:
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Clothing that is clearly and prominently branded with a business logo can sometimes qualify.
Courts have recognized that when clothing strongly resembles a uniform, it stops functioning as normal street wear and rather falls in line with wear for normal business operations..
Note: The IRS looks at substance over form (meaning that regardless of the business function you are claiming, it should be reflected in the true everyday/underlying reality of the use/application). Basically if you are saying one thing, but really mean another.
A tiny logo slapped somewhere on the shirt usually isn’t enough. The clothing must clearly function as work apparel or a uniform. In this case, it meets “form” by virtue of there being a business logo present on the clothing, but the “substance” element says it is practically unrecognizable and your intent probably wasn’t to brand this for true business use.
Examples that may qualify:
Branded company polos worn only for client meetings or events
Staff uniforms with large logos or identifiable branding
Apparel clearly designed as workwear
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Protective gear required for hazardous or physically demanding work is often deductible.
Examples may include:
Hard hats
Steel-toe boots
Fire-resistant outerwear
Safety vests
Protective gloves or outer layers
These items are considered ordinary and necessary in industries where safety risks exist.
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Certain professions require clothing that is clearly not everyday wear.
Examples include uniforms used by:
Healthcare workers
Airline staff
Law enforcement
Firefighters
Transportation workers
Delivery services
Because these items are identifiable uniforms, they generally satisfy the court tests.
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Musicians, actors, entertainers, and performers may deduct clothing that is clearly theatrical or stage-specific.
For example:
Stage costumes
Specialized performance outfits
Clothing designed specifically for productions
If it looks like something you’d wear to the grocery store, though, it probably won’t pass the test.
Clothing That Is Generally Not Deductible
Even when clothing is required for work, it can and often still fails the objective “suitable for everyday wear” test.
Some examples that typically do not qualify:
Business suits
Dress shirts or blouses
Professional shoes
Gym clothing used by fitness trainers
Black clothing required for service staff
Makeup or grooming expenses
Even if your profession expects a certain appearance, the IRS still considers these items personal clothing.
It may be occurring to you that this is often where online influencers and gurus are claiming that these clothing items are deductible. Hopefully by now, you have recognized the nuance and specificity present and necessary when thinking about this topic. To be a bit more helpful, let’s cover some of the trickier clothing areas as well.
Examples That Can Be Harder to Interpret
Some situations fall into gray areas and require a bit more industry judgement. We’ve called out a few common ones for reference:
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Workout clothing may be required for the job. But since the average person also wears athletic clothing casually, the IRS usually considers it personal wear.
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If the jacket prominently features the brokerage brand and is worn only during showings or events, it may qualify.
If it looks like a normal jacket someone might wear socially, it probably doesn’t.
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Influencers sometimes purchase clothing specifically for content.
However, if the clothing could reasonably be worn outside filming, the IRS generally considers it personal.
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Black shirts or pants required by an employer still fail the objective test because they are common everyday clothing.
3 Steps For Solopreneurs To Evaluate Deductibility of Their Own Clothing Expenses
In line with our “substance over form”, and other blog posts, you should answer these questions in good faith. If you’re approaching them with the desired outcome of being deductible, you probably will lead yourself to rationalizing responses to support that conclusion. Instead, approach the below genuinely and as if you can accept a conclusion of either deductible or non-deductible, allowing the facts to direct the outcome.
Step 1: Is this clothing required or essential for my work?
If the answer is no, stop there. It’s not deductible.
Step 2: Could the average person wear this casually?
If yes, the IRS will likely treat it as personal clothing. Reminder: Your personal intent does not change that, so think objectively.
Step 3: Do I wear this outside work?
If the answer is yes, the deduction fails.
If the clothing passes all three questions, it may qualify as a business expense.
Final Thoughts - Deducting Clothes in Style
Clothing deductions are one of those areas where the line between business and personal is actually more clear in tax law than it may feel in real life. That said, it never hurts to work with a professional to make sure you are taking the right deductions and staying in line with the law.
If you are looking to partner with someone to tailor tax planning for you, consider working with Akouson Financial. We seam-lessly integrate clear communication with the backing of tax knowledge.
Sew…book a call with us today!
(Hope you enjoyed the puns!)
Disclaimer:
The information provided in this blog is for general educational purposes only and should not be construed as tax, legal, or financial advice. Every individual’s situation is unique, and you should consult a qualified tax professional or financial advisor before making decisions based on this content. Akouson Financial and its representatives are not responsible for any actions taken based on the information provided herein.