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Tax Deduction? You Be the Judge

A concert pianist needed a special wardrobe for her performances. She went to a high-end department store and bought special evening gowns, cocktail dresses, jewelry and shoes to wear exclusively while on stage. She then deducted these costs on her tax return as routine business expenses. The IRS challenged her deductions, and the case went to court. Who won?

If you ruled for the IRS, you’re right.

The expense of work clothing is tax-deductible only if the clothes cannot take the place of regular clothing — for example, a firefighter’s uniform. Since other women wear the same gowns, dresses, shoes and jewelry in social settings, the court ruled the items were not allowable as a business expense — despite the defendant’s argument that the dresses were “too pretentious” to wear anywhere else.

From the January 2010 Inside Personal Finance

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