No Clothing Deduction

Hi!

I've just discovered your website and I think it's great! I'll be reading it regularly for sure.

If you have a small boutique and you are the owner and naturally you take some of the clothing home to wear it yourself. From a business perspective it's important that you wear your merchandise - it makes it easier to sell it, you need to know if it holds up, you need to know if it fits right. I know you would have to pay use tax on the cost of the merchandise that you wear. But can you deduction the cost as a business expense? And if so what would you call that account? I thought of research and development, but that doesn't sound quite right.

-- Kaylyn


Hello Kaylyn,

The IRS is a stickler on this. The answer is no, you cannot deduct these clothes because you wear them in your everyday activities. Were you to wear something for a specific period of time, keep a written record of when worn and the result of the test, then you'd be able to take the deduction.

Take a look at this post Clothing and Make-up as a Business Expense .

Best,
June