Prior to 2018, everyone could potentially claim a deduction on Schedule A for unreimbursed work-specific clothing and laundering expenses. After the Tax Cuts and Jobs Act, most employees lost this deduction, but Clergy can still deduct these costs on their Schedule SE. However, there are still restrictions in place on the deduction.
First, the expense must be paid out of pocket. You cannot get any deduction for expenses for which you received reimbursement.
Second, the clothing cannot be suitable for wear outside of work. For example, a suit would not qualify for a deduction, even if you bought it specifically for a wedding or funeral. You could wear a suit outside of your place of employment. On the other hand, a stole or cassock used only for religious ceremonies would qualify as a deductible item, since you could not ordinarily use this for public wear.
Third, if questioned about the deduction you may need to provide documentation to IRS. Keep receipts related to the expense and be prepared to prove necessity of the clothing for your work.
More questions? Clergy Financial Resources can help. Our 1040 tax preparation services come with a tax interview where we can help answer many of your questions about clergy income, deductions and other issues. Visit https://www.clergytaxnet.com/services/clergy-tax-preparation/ for more details.
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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