Can Influencers Write Off Clothes for Business Expenses?

Self-employed individuals, including social media influencers, can reduce their taxable income by understanding which expenses can reduce taxable income is a valuable financial practice. Business expenses are costs incurred while operating a trade or business that can be deducted from gross income. These deductions lower the amount of income subject to taxation, potentially resulting in a reduced tax liability. Like other entrepreneurs, influencers can deduct legitimate business costs, but specific rules apply to categories like clothing.

Understanding Business Expense Basics

To be deductible, a business expense must be both “ordinary” and “necessary.” An ordinary expense is common and accepted in the particular industry. A necessary expense is helpful and appropriate for the business, though it does not need to be indispensable.

The Internal Revenue Service (IRS) outlines these criteria to ensure only legitimate business-related costs are deducted. Expenses that are lavish or extravagant are not considered ordinary and necessary. Personal, living, or family expenses are not deductible, even if they have some incidental connection to a business.

Qualifying Clothing Expenses

Clothing expenses are subject to strict IRS rules. For clothing to be deductible, it must meet a two-part test: it must be specifically required or essential for the business activity, and it must not be suitable for everyday wear outside of work.

Regular clothing, even if worn exclusively for content creation, is generally not deductible because it is adaptable for personal use. For instance, expensive branded apparel or fashionable outfits worn by an influencer for posts would not qualify as a deduction if they could also be worn in non-business settings. The IRS views these as personal expenses, regardless of their cost or how often they are used for business purposes.

However, specific types of clothing can be deductible. Uniforms that feature a company logo or are distinctly identifiable with the business, such as scrubs for a medical professional or protective gear for a construction worker, typically meet the criteria. Costumes worn for performances or specific theatrical productions, which are clearly unsuitable for daily life, can also be deducted. The key distinction lies in whether the clothing has a practical, everyday use beyond the business.

For influencers, if clothing serves as a prop or is part of a specific, non-everyday costume for a video, it might be deductible. Laundry and dry-cleaning costs for qualifying work clothes are also deductible. However, if the clothing could be worn to a grocery store or social event, it generally falls outside the deductible category, even if it’s primarily used for business content.

Essential Record Keeping

Maintaining thorough and accurate records is fundamental for substantiating any business deduction, including qualifying clothing expenses. The IRS requires taxpayers to keep records that establish the elements of each business expense. This documentation supports the amounts claimed and demonstrates the business purpose of each expenditure.

Key records to retain include receipts, invoices, canceled checks, and bank or credit card statements. For each expense, the record should clearly show the date, the amount paid, the payee, and a detailed description of the item or service purchased. It is also important to document the specific business purpose for the expense.

A detailed log or diary can supplement these documents, especially for expenses that might not have a formal receipt, such as mileage. This log should record the date, amount, and business reason for the expense. Any chosen system must accurately reflect the business’s financial activities and be accessible for IRS review.

Reporting Deductions

Self-employed individuals, including influencers operating as sole proprietors or single-member Limited Liability Companies (LLCs), report their business income and expenses on Schedule C, Profit or Loss From Business, which is filed with their Form 1040. Deductible business expenses, such as qualifying clothing costs, are listed on this form to calculate the net profit or loss from the business.

The net income calculated on Schedule C then flows to the individual’s Form 1040. This net income is also subject to self-employment tax. Self-employment tax covers Social Security and Medicare taxes for self-employed individuals.

The self-employment tax is calculated on Schedule SE, Self-Employment Tax. If net earnings from self-employment are $400 or more, Schedule SE must be filed. A portion of the self-employment tax paid can be deducted from gross income on Form 1040, which helps offset the tax burden.