Is the cost of uniforms tax deductible?

What is the tax treatment for uniforms for business owners? While it seems the answer is straightforward, there are some areas that could be confusing, especially for our clients.

Section 162 of the Internal Revenue Code (IRC) allows you to deduct “all the ordinary and necessary expenses you incur during the taxable year in carrying on your trade or business, including the costs of certain materials, supplies, repairs, and maintenance.” However, Section 262 prohibits deductions for personal, living, or family expenses, so where do we go from here?

Consider the following  scenarios:

Scenario 1: Your client owns their own janitorial cleaning business, and wears jeans, tennis shoes, and T-shirts while working. Your client does not have a uniform policy, so they do not require a certain type of clothing to be worn while providing services. The type of clothing worn is considered suitable for everyday wear and can be worn outside of work.

Scenario 2: Your client owns their own janitorial cleaning business and orders uniforms to be worn while providing the service. These include logo coveralls, hairnets, shoe covers, and other related items. Your client has a uniform policy that requires specific clothing to be worn while providing services, but this type of clothing is not considered suitable for everyday wear.

Scenario 3: Your client owns their own medical practice, and wears business suits, slacks, and typical casual-professional dress while working. They do not have a uniform policy, so the client does not require a certain type of clothing to be worn while providing the services. The type of clothing worn is considered suitable for everyday wear and can be worn outside of work.

Scenario 4: Your client owns their own medical practice and orders uniforms to be worn while providing the service. These include scrubs, hairnets, and shoe covers specifically needed for their occupation. Your client has a uniform policy that requires specific clothing to be worn while providing services. This type of clothing is not considered suitable for everyday wear.

Which scenarios are eligible to claim a tax deduction for uniforms as a business expense?

A typical uniform is a piece of clothing you don’t wear outside of work, and it’s not suitable for everyday wear. It’s also a piece of clothing that is required to be worn while performing a job or providing a service.

In scenarios 1 and 3, business owners cannot deduct their clothing expenses as uniforms because sweats, T-shirts, and tennis shoes can be worn everyday outside of work and are not required to be worn while providing the service. The same goes for professional dress, business suits, and dress shoes. These can be worn outside of work for other purposes.

However, in scenarios 2 and 4, the owner can deduct the cost of the uniform because that type of clothing is not suitable for everyday wear and typically not worn outside of work. There is also a uniform policy in place that makes it a requirement for that type of clothing to be worn while providing the service.

Other examples include:

• Protective clothing, such as hard hats and steel toe boots, typically worn in construction and manufacturing.
• Scrubs that are typically worn in the medical field.
• Logo clothing or branded uniforms.

Business owners can also deduct the cost of dry cleaning and alterations of these types of clothing, but make sure they maintain documentation of purchases. This includes receipts, uniform policies, and evidence that the required uniforms are not suitable for everyday wear outside of work.

How to enter the cost of uniforms into Intuit® ProConnect™ Tax

When preparing a Schedule C for a business client in ProConnect Tax, you’ll notice a line item on the Schedule C Income Statement for Uniforms.

In ProConnect Tax, any amount typed into the Uniforms line on the Income Statement is included in Line 27a Other Expenses in total.

Any amount included in 27a Other expenses carries over to Part V (line 48), which list out each expense that is included in 27a Other Expenses.

Your takeaway

If the uniform is not suitable for everyday wear and required to be worn to perform the job or provide the service, then the cost of the uniform is generally tax deductible to the business owner or employer.

Disclaimer: This article is intended for self-employed and employers. The Tax Cuts and Jobs Act eliminated the deduction of miscellaneous itemized deductions such as deductions for employee businesses. This means that W-2 employees generally cannot deduct work clothing expenses on their federal tax returns, even if the clothing is required and not suitable for everyday wear.