Occasionally, workers might face a situation in which they have to pay out of pocket for work related expenses, such as having to buy your own work uniform. However, Internal Revenue Service tax-deduction rules could help you recoup those costs, depending on what constitutes your uniform or needed apparel for work.
To deduct your work apparel, the first requirement is that it has to be required by your employer as a condition of your employment. For example, if your employer just suggests that you wear polo shirts with the company logo to work, but doesn't require it, it doesn't count. However, if you're working at a renaissance fair and you have to dress the part, you've met the criteria.
To meet the second criteria, your work apparel can't be suitable for wearing outside of your job. For example, if your employer requires you to wear a red polo shirt and blue jeans to work each day, you can't deduct the cost of those clothes because you could wear them outside of work. Similarly, if you have to wear a fancy suit and tie, you can't claim a deduction because those are wearable outside the office. The IRS doesn't care whether you actually wear the clothes outside the office, so even if you don't wear the clothes except to work, you don't get a deduction. However, you can deduct safety-related clothing such as hard hats or work gloves if required for your job.
Your work apparel counts as an unreimbursed employee expense, which is a miscellaneous tax deduction. It's subject to a 2 percent of adjusted gross income threshold limit, which means the costs aren't all deductible. Instead, the amount up to 2 percent of your adjusted gross income can't be deducted at all. For example, say your adjusted gross income is $45,000. The first $900 of your work apparel isn't deductible.
If you've cleared all the eligibility barriers to claiming the deduction, you've got to get through reporting it on your income taxes. First, you have to itemize your deductions with Schedule A. On Schedule A, write the full amount you paid for your qualifying work apparel on line 21. Then, use lines 24 through 27 to figure the amount you can deduct. Finally, replace your standard deduction with the sum of your itemized deductions on line 40 of your Form 1040 tax return.
Based in the Kansas City area, Mike specializes in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."