The deductibility of work tools and uniforms on your federal income tax return depends on several factors, including your employment status (employee vs. self-employed), the nature of the expenses, and whether you are reimbursed by your employer.
1. Employees vs. Self-Employed Individuals
Employees
- Suspension of Unreimbursed Employee Expenses
Under the Tax Cuts and Jobs Act (TCJA) of 2017), most unreimbursed employee expenses, including work tools and uniforms, are no longer deductible as miscellaneous itemized deductions for tax years 2018 through 2025.
Authoritative Source:- IRS Publication 529 – Miscellaneous Deductions
- “You can no longer claim any miscellaneous itemized deductions that are subject to the 2% of adjusted gross income limitation, including unreimbursed employee expenses.”
- Publication 529, Page 2
- IRS Publication 529 – Miscellaneous Deductions
- Exceptions
Certain employees can still deduct these expenses:- Armed Forces reservists
- Qualified performing artists
- Fee-basis state or local government officials
- Employees with impairment-related work expenses
- These individuals can deduct unreimbursed employee expenses using Form 2106 and report the deduction on Schedule 1 (Form 1040), Line 12.
Authoritative Sources:- IRS Publication 529
- “You can deduct unreimbursed employee expenses only if you fall into one of the following categories…”
- Publication 529, Page 3
- IRS Instructions for Form 2106
- Provides guidance on who can use the form and how to report expenses.
- Form 2106 Instructions
- IRS Publication 529
Self-Employed Individuals
- Deductible Business Expenses
If you are self-employed, you can deduct ordinary and necessary business expenses, including tools and uniforms, on Schedule C (Form 1040) or Schedule F for farmers.- Ordinary Expense: Common and accepted in your trade or business.
- Necessary Expense: Helpful and appropriate for your business.
- Authoritative Source:
- IRS Publication 535 – Business Expenses
- “To be deductible, a business expense must be both ordinary and necessary.”
- Publication 535, Chapter 1
- IRS Publication 535 – Business Expenses
2. Work Tools
Deductibility Criteria
- Employees
Generally not deductible due to TCJA unless you fall under one of the exceptions mentioned.
Authoritative Source:- IRS Publication 529
- “You can no longer deduct unreimbursed employee expenses.”
- Publication 529, Page 2
- IRS Publication 529
- Self-Employed
Deductible if:- The tools are directly related to your trade or business.
- The cost is not reimbursed.
- Authoritative Source:
- IRS Publication 535
- “You can deduct the cost of tools used in your business if you normally use them up in less than one year.”
- Publication 535, Chapter 1
- IRS Publication 535
- Depreciation vs. Expense
- Small Tools (Short-lived): May be fully expensed in the year purchased.
- Larger Tools (Long-lived): May need to be capitalized and depreciated over their useful life using Form 4562.
- Authoritative Source:
- IRS Publication 946 – How to Depreciate Property
- “You generally must depreciate tangible property used in a trade or business over a set number of years.”
- Publication 946, Chapter 1
- IRS Publication 946 – How to Depreciate Property
Record-Keeping
- Keep receipts and records of all tool purchases.
- Document how each tool is used in your business.
Authoritative Source:
- IRS Publication 583 – Starting a Business and Keeping Records
- “Well-organized records make it easier to prepare your tax return and help provide answers if your return is selected for examination.”
- Publication 583, Page 11
3. Uniforms
Deductibility Criteria
- Required as a Condition of Employment
The uniform must be specifically required by your employer or essential for your business.
Authoritative Source:- IRS Publication 529
- “You can deduct the cost and upkeep of work clothes if the following two requirements are met.”
- Publication 529, Page 4
- IRS Publication 529
- Not Suitable for Everyday Wear
The uniform must not be adaptable to general use as ordinary clothing.
Authoritative Source:- IRS Publication 529
- “They are not suitable for ordinary street wear.”
- Publication 529, Page 4
- IRS Publication 529
Examples
- Deductible Uniforms:
- Police officers’ uniforms
- Firefighters’ gear
- Nurses’ scrubs
- Specialty attire like chef’s coats or laboratory coats
- Authoritative Source:
- IRS Publication 529
- “Protective clothing required in your work, such as safety shoes or boots, safety glasses, hard hats, and work gloves.”
- Publication 529, Page 4
- IRS Publication 529
- Non-Deductible Clothing:
- Business suits
- Jeans and shirts that can be worn off-duty
- Attire with company logos that are suitable for everyday wear
- Authoritative Source:
- IRS Publication 529
- “A distinctive uniform does not qualify if it is suitable for ordinary wear.”
- Publication 529, Page 4
- IRS Publication 529
Cleaning and Maintenance
- Costs for cleaning and maintaining deductible uniforms are also deductible.
Authoritative Source:
- IRS Publication 529
- “If you can deduct the cost of the clothing, you can also deduct the cost of keeping it clean and in good repair.”
- Publication 529, Page 4
4. How to Claim the Deduction
For Employees
- Form 2106 – Employee Business Expenses
- Only applicable if you qualify under the exceptions.
- Enter expenses related to tools and uniforms.
- Authoritative Source:
- IRS Instructions for Form 2106
- Provides detailed instructions on completing the form.
- Form 2106 Instructions
- IRS Instructions for Form 2106
- Schedule 1 (Form 1040)
- Report the total deduction on Line 12.
- Authoritative Source:
- IRS Instructions for Form 1040
- “Line 12: Deductible part of self-employment tax from Schedule SE, line 13.”
- Form 1040 Instructions, Schedule 1
- IRS Instructions for Form 1040
For Self-Employed Individuals
- Schedule C (Form 1040)
- Report tools under Part II, Line 22 (Supplies) or capitalize and depreciate them.
- Report uniforms under Part II, Line 27a (Other Expenses) with a description.
- Authoritative Source:
- IRS Instructions for Schedule C
- Provides guidance on where to report various business expenses.
- Schedule C Instructions, Page C-7
- IRS Instructions for Schedule C
5. Depreciation and Section 179 Expensing
Depreciation (Form 4562)
- For tools and equipment with a useful life of more than one year.
- Deduct the cost over the asset’s useful life.
Deductions Limit
- For tax year 2024, the maximum Section 179 expense deduction is $1,220,000, and the phase-out threshold is $3,050,000.
Authoritative Source:
- IRS Publication 946
- “Depreciation is an annual income tax deduction that allows you to recover the cost or other basis of certain property over the time you use the property.”
- Publication 946, Chapter 1
- Form 4562 – Depreciation and Amortization
Section 179 Deduction
- Allows immediate expensing of qualified equipment up to certain limits.
- Subject to income limitations and business income.
Authoritative Source:
- IRS Publication 946
- “You can elect to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service.”
- Publication 946, Chapter 2
6. State and Local Tax Considerations
- Some states may allow deductions for unreimbursed employee expenses even if the federal deduction is suspended.
- Check your state’s tax laws or consult a tax professional.
Authoritative Source:
- State Department of Revenue Websites
- Varies by state; consult your state’s official tax resources.
7. Key Considerations and Recommendations
- Employer Reimbursement
If your employer has an accountable plan and reimburses you for these expenses, you do not include the reimbursement in your income, and you cannot deduct the expenses.
Authoritative Source:- IRS Publication 15 (Circular E), Employer’s Tax Guide
- “Reimbursements under an accountable plan aren’t wages and aren’t subject to income tax withholding and aren’t reported on Form W-2.”
- Publication 15, Page 15
- IRS Publication 15 (Circular E), Employer’s Tax Guide
- Non-Accountable Plans
If the reimbursement is under a non-accountable plan, it is included in your wages, and you may be able to deduct the expenses if you qualify under the exceptions.
Authoritative Source:- IRS Publication 15
- “Amounts paid under a nonaccountable plan are wages and are subject to income tax withholding.”
- Publication 15, Page 15
- IRS Publication 15
- Documentation
Keep thorough records, including:- Receipts
- Employer requirements for uniforms
- Evidence that clothing is not suitable for everyday wear
- Authoritative Source:
- IRS Publication 583
- “You must keep records to verify certain information about your business assets.”
- Publication 583, Page 11
- IRS Publication 583
- Consult a Tax Professional
Due to the complexity and potential changes in tax laws, consider consulting a CPA or tax advisor, especially if:- You have significant expenses.
- You are unsure about the applicability of exceptions.
- You have dual status as an employee and self-employed individual.
- Authoritative Source:
- General recommendation; no specific IRS source.
- Stay Informed
Tax laws can change. Always refer to the most recent IRS publications or official guidance.
Authoritative Source:- IRS Website
Examples
1. Employee Not Qualified Under Exceptions
- Scenario: Jane is a retail employee required to wear black pants and a white shirt.
- Deductibility: Not deductible, as the clothing is suitable for everyday wear and unreimbursed employee expenses are suspended.
Authoritative Source:
- IRS Publication 529
- “You cannot deduct the cost of clothing that you wear to work if it is suitable for everyday wear.”
- Publication 529, Page 4
2. Self-Employed Mechanic
- Scenario: Mike is a self-employed mechanic who purchases specialized tools and wears protective coveralls.
- Deductibility: Deductible, as they are ordinary and necessary business expenses.
Authoritative Source:
- IRS Publication 535
- “You can deduct the cost of work clothes and uniforms if they are necessary for your work and not suitable for everyday wear.”
- Publication 535, Chapter 1
3. Qualified Performing Artist
- Scenario: Sarah is a professional dancer with unreimbursed expenses for costumes not suitable for everyday wear. To qualify as a “qualified performing artist,” Sarah must meet specific criteria, including having at least two employers, receiving a certain amount in wages, and having allowable business expenses that exceed 10% of her gross income from performing arts.
- Deductibility: Deductible, using Form 2106 and reported on Schedule 1, because she is a qualified performing artist.
Authoritative Source:
- IRS Publication 529
- “If you are a qualified performing artist, you may be able to deduct unreimbursed employee business expenses.”
- Publication 529, Page 3
- IRS Instructions for Form 2106
Disclaimer: The information provided is for general informational purposes and should not be considered legal or tax advice. Tax laws are complex and subject to change. For advice specific to your situation, consult a qualified tax professional or refer to official IRS resources.
Further Clarification
IRS Publication 529, titled “Miscellaneous Deductions,” has been discontinued. The IRS now provides guidance on business expenses through other publications and resources.
For information previously covered in Publication 529, you can refer to the following resources:
- IRS Publication 535 – Business Expenses: This publication offers comprehensive guidance on deductible business expenses, including those related to work tools and uniforms. Publication 535
- IRS Publication 463 – Travel, Gift, and Car Expenses: This publication provides information on deductions for travel, gift, and car expenses, which may be relevant depending on your specific circumstances. Publication 463