Although an essential part of managing your finances, filing a tax return can be complicated at the best of times. Tax rules are often hard to decipher and it’s not always obvious which deductions apply. Understanding which expenses are deductible and which aren’t can help you to save money and ensure you stay on the right side of the IRS.
If you’re required to wear a uniform for work, or if your employer has a set dress code that you have to adhere to, you may well think that any money you spend on workwear will be tax deductible. However, this isn’t always the case. In fact, there are a lot of circumstances in which you’ll be unable to claim deductions for your work clothes, even if they’re a necessary part of the job.
We’re throwing our hat into the great tax debate to help you work out if your bibs, jackets and pants are tax deductible. Keep reading to find out more.
Are My Work Clothes Tax Deductible?
While work clothes can be tax deductible, they aren’t always eligible for a deduction. In order for your suit, protective wear, jacket or pants to qualify for uniform tax relief you need to meet a few different criteria, these are:
You Are Required to Wear a Uniform or Follow a Dress Code
When deciding if your work clothes are deductible, the first thing you should do is check your employer’s workwear policy. If the policy specifically states that you’re required to dress in a certain way, you may be able to deduct the cost of your work clothes when filing your tax return.
Your Work Clothes Aren’t Suitable for Everyday Wear
However, even if your employer does require you to dress in a certain way, it doesn’t necessarily mean you can deduct clothing expenses from your tax bill. This is because clothes that can be worn in other settings aren’t eligible for a deduction. So, if you have to wear a suit to the office or a non-branded jacket to site, your workwear won’t be tax deductible as these items can easily be worn in other settings.
Even if you don’t wear your work hoodie or all-weather jacket when you’re at home or out and about, it won’t be tax deductible if it’s suitable for regular wear. This means that, in general, work clothes can only be deducted on taxes if they’re unsuitable for wearing outside of the workplace. For example, hard hats, medical scrubs and heavily branded uniforms would be considered eligible for a deduction.
Your Work Clothes Are Protective
If your job is inherently dangerous and you’re required to wear protective clothing while at work, these items should be eligible for a tax deduction. For instance, if you wear flame resistant clothing, cleanroom or ESD clothing or work-specific PPE, you should be able to deduct the cost of these items.
To sum up, in order for your work clothes to be tax deductible, they have to meet all three of the following criteria:
- The clothing is required or essential for your job.
- The clothing is distinctive orprotective.
- The clothes are not suitable for everyday wear outside work.
Uniform Maintenance Costs
If you meet the above criteria, as well as deducting the cost of your workwear, you can also deduct any expenses you incur maintaining and caring for the clothes. So, if you have a uniform that needs dry cleaning, you can add a laundry tax deduction to your 2020 return. If your work clothes need maintaining in other ways, these costs should also be eligible for a deduction. If you want to deduct laundry and maintenance expenses, you’ll need to keep all relevant receipts or invoices.
What is the Uniform Tax Relief Amount?
Although you can deduct work clothes on taxes in certain circumstances, the process isn’t as straightforward as you might hope. Before you begin deducting your uniform and protective wear, you first need to evaluate whether the sum of all eligible expenses exceeds the standard deduction you can claim for your filing status.
The IRS requires you to report workwear costs as a miscellaneous expense subject to the 2% adjusted gross income (AGI) floor. To work out your uniform tax deduction for 2020, you need to reduce the combined total of all miscellaneous expenses, including your work clothes, by 2% of your AGI.
To do this, add all the deductions in this category together – other eligible deductions include work-related travel, work tools and professional journals – and subtract 2% of your AGI. This will give you the amount you can deduct. You can find your AGI on line 8b of your Form 1040.
Can Businesses Make a Uniform Tax Relief Claim?
If you’re a business owner who purchases uniforms or work clothes for their employees, this workwear may also be deductible. However, you’ll have to meet the same strict eligibility criteria as employees in order to make a deduction.
In general, employers are able to deduct the cost of workwear if this workwear is reasonable and necessary. So, for example, if you run a construction site, hard hats and safety boots would be considered reasonable and necessary.
Similarly, if you run a public-facing business, it would be reasonable for your employees to wear branded uniforms. As long as these uniforms clearly display your company logo and are unsuitable for wearing in other settings, they should be eligible for a deduction.
If you do run a business that requires its employees to wear uniforms, it’s a good idea to have your staff change into their branded clothes when they arrive at work and change back into street clothes when they leave your premises. As well as helping to maintain hygiene, this can make it easier to claim your uniform tax deductions.
Can Businesses Claim a Laundry Tax Deduction?
Like employees, businesses can also make tax deductions for laundry and maintenance costs. So, if you pay for your employees’ uniforms to be dry cleaned, laundered or maintained in any other way, the expenses should be deductible.
Is Workwear Tax Deductible if You’re Self-Employed?
If you’re self-employed, claiming a uniform tax deduction can be difficult. This is because, if you work for yourself, there’s no one to require you to wear a uniform. This can make it hard to prove that a branded uniform is an essential expense. However, you should still be able to deduct the cost of protective clothing like hard hats and steel capped boots.
Although not all workwear is tax deductible, there are a lot of specialist items that can be deducted from your tax bill. Taking full advantage of these deductions can minimise your tax bill and help your business to thrive. Find out more about the protective wear and specialist work clothes we offer by exploring our range today.
About the Author
Nick Warrick
Nick Warrick is the Sales Manager at All Seasons Uniforms. With over 15 years of experience in the work uniform business, he has worked with hundreds of clients across 20 different industries. Holding bachelor’s degrees in both Business Administration and Information Technology, Nick revamped the company’s online presence, offering its customers a new uniform shopping experience.