Are Business Clothes Tax Deductible
When you purchase a new suit to wear for your business or a uniform for your company, it may seem that these are work expenditures and valid factors for tax deduction. Not necessarily, as said by IRS.
Work clothes which can be worn after work are no longer considered valid for tax deduction than anything else inside your closet. To qualify for tax deduction, the business clothes you will be purchasing should be mandatory and unsuitable for daily casual wear.
No matter how much you spent for your new suit that you typically wear to the business meetings can also be wore to different parties so IRS says it can’t be covered under tax deduction.
Finding Whether Your Business Clothes are Tax Deductible
It is very important to find out whether your work clothes are all subject to tax deduction or not. On the other hand, it is simply not enough to just buy those clothes, and never wear them any day of the month or year. IRS has admitted deductions for some hard hats, theoretical costumes and other safety gear. Among those items which don’t qualify are overalls, bibs and white dress shirts even when they are needed to be worn inside the workplace.
Document the Policies of Your Employees
You should have a copy of the policy that is implemented by your employer. For instance, a pilot was capable of presenting the written evidence that his employer has obliged him to wear shoes that are not appropriate for everyday use when IRS questioned and doubted his deduction. The pilot was able to deduct the price of the shoes and the expense of maintaining them well polished.
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Keep Your Receipts
When IRS asks any question, the receipts will be providing proof that you have spent some money in buying those clothes that you have been claiming valid for tax deduction. The receipts for the amount of money that you spend in maintaining the clothes like dry cleaning, tailoring services and shoe shining are equivalently crucial sine these expenses are also deductible.
You should add the clothing costs with other miscellaneous itemized deductions. Bear in mind that the work clothes are some of the miscellaneous deductions which are just deductible to the extent that the overall amount exceeds two percent of the adjusted gross salary.
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Paying a hefty insurance premium every year is pretty expensive and even more so when you are healthy and young! You may never need to use it but you still have to pay the premiums just in case. With High Deductible Plans and Health Savings Accounts, you not only have a great insurance policy but you also save a lot of money.
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Now that you are already provided information why it is important for you to pay tax, start to enjoy it. Just only think that you give money for your country’s improvement.