Most employers impose a dress code for the office. As a result, there are more than a few members of the American workforce who must purchase items including expensive suits, dresses, shirts, blouses, and shoes to observe an employer’s dress code. Many employees have wondered whether the cost of these clothes, often worn only for work, is deductible at tax time.
Section 262 of the Internal Revenue Code expressly denies a deduction for “personal, living, or family expenses,” while section 162(a) of the Code allows a deduction for all ordinary and necessary expenses paid or incurred in carrying on any trade or business. Despite the fact that a wardrobe is a necessary condition of employment, the cost of the wardrobe has generally been considered a nondeductible personal expense pursuant to § 262. Kennedy v. Commissioner, 451 F.2d 1023 (3d Cir. 1971). The general rule is that where business clothes are suitable for general wear, a deduction for them is not allowable. Donnelly v. Commissioner, 262 F.2d 411 (2d Cir. 1959). Such costs are not deductible even when it has been shown that the particular clothes would not have been purchased but for the employment. Stiner v. United States, 524 F.2d 640 (10th Cir. 1975).
To determine whether the cost of clothing is deductible as an ordinary and necessary business expense, a three-part test must be met: (1) The clothing is required or essential in the taxpayer’s employment; (2) the clothing is not suitable for general or personal wear; and (3) the clothing is not so worn for general or personal wear. Yeomans v. Commissioner, 30 T.C. 757, 767 (1958). When the cost of acquiring clothing is deductible, then the cost of maintaining such clothing is likewise deductible as an ordinary and necessary business expense. Mortrud v. Commissioner, 44 T.C. 208 (1965).
The employer must specifically require the clothing for the job and the clothing must not be suitable as a substitute for regular clothing. Examples of workers who may be able to deduct the cost and maintenance of work clothes are: firemen, policemen, transportation workers, health care workers, letter carriers, and delivery workers. Also, the costs of protective clothing required by a job such as hard hats, gloves, safety glasses, boots or shoes, may be deducted as an ordinary and necessary business expense.
If you have a question about any ordinary and necessary business expense, call THE TAX EXPERTS at the Thorgood Law Firm www.thorgoodlaw.com. For a FREE consultation, call 212-490-0704.
