uniforms/work clothes

[oceanlovin'ea]

Client has LLC taxed as S corp. He and his employees work outside in heat and wear regular shirts and pants along with protective safety equipment.
The clothes are only worn for work as they would not be suitable to wear somewhere else after being worn for work.
He really doesn't want to go to the expense of having business name sewn on clothes as they last less than a year.
Can he, as the business owner, decide that the business will reimburse or purchase work clothes for him and his employees? He would have to keep a written record of this.

I know the work clothes/ uniforms requirements. But i wasn't sure if a business entity can make such a decision.

Linda, EA

[veritas]

I don't know

Client has LLC taxed as S corp. He and his employees work outside in heat and wear regular shirts and pants along with protective safety equipment.
The clothes are only worn for work as they would not be suitable to wear somewhere else after being worn for work.
He really doesn't want to go to the expense of having business name sewn on clothes as they last less than a year.
Can he, as the business owner, decide that the business will reimburse or purchase work clothes for him and his employees? He would have to keep a written record of this.

I know the work clothes/ uniforms requirements. But i wasn't sure if a business entity can make such a decision.

Linda, EA

why some business owners cut corners on stuff like this. Spend a little more money to be a professional and put the badges on the shirts. It's inexpensive advertising.

Or maybe he's ashamed of what they do?

[Burke]

He and his employees work outside in heat and wear regular shirts and pants along with protective safety equipment.
The clothes are only worn for work as they would not be suitable to wear somewhere else after being worn for work.Linda, EA

I don't think the rule says unsuitable for wear AFTER being worn for work. Only that if they could be classified as normal street wear.

[BHoffman]

We don't need no stinking badges

why some business owners cut corners on stuff like this. Spend a little more money to be a professional and put the badges on the shirts. It's inexpensive advertising.

Or maybe he's ashamed of what they do?

Perhaps using an indelible "sharpie" pen to draw a logo and the company name on the shirts would work

[oceanlovin'ea]

Sharpie - I like that!

I told him that this is just IRS rules. He will have to find a way to mark the clothes. If he is only wearing them for work, a Sharpie would work fine. ;

He is in lawn service and he says all his clients know him. I will approach it as "advertising" and that might help.

Linda, EA

[veritas]

Do his

I told him that this is just IRS rules. He will have to find a way to mark the clothes. If he is only wearing them for work, a Sharpie would work fine. ;

He is in lawn service and he says all his clients know him. I will approach it as "advertising" and that might help.

Linda, EA

future clients know him? What a knucklehead.

[oceanlovin'ea]

ok, we all agree that he SHOULD be putting his business name on the shirts, etc. But none of you have answered my question if he can make a business decision to pay for his employee's uniforms/work clothes if he chooses.

Linda, EA

[BHoffman]

Linda - my magic 8 ball says "Not at this time".

I have landscaper clients and they buy work shirts from used clothing stores. The cost is minimal and we don't deduct.

[S T]

Hmm

I have a franchisee that his employees are required to wear the "Uniform Shirts" by the Franchisor - Franchisee (T/P client) purchases those shirts with badges and furnish to the Employee - and we deduct as a uniform expense.

Employee is responsible for the laundry/maintenance of those "uniforms" and if misplaced - the employee is responsible for the replacement. Normal wear/tear on the "uniform" the t/p replaces. (We have in our Employee Handbook)

Under an IRS pub on fringe benefits - I found work clothes and Uniform allowances/Reimbursements -

Work Clothes and Uniform Allowances and Reimbursements
Clothing or uniforms are excluded from wages of an employee if they are:
•
Specifically required as a condition of employment, and
•
Are not worn or adaptable to general usage as ordinary clothing.
The accountable plan rules must be met for reimbursements or clothing allowances. IRC §162; Reg. §1.62-2(c)(1)
Note: If the clothing qualifies as excludable, then reimbursement for the cleaning costs are also excludable.
Example: Periodic allowance payments are made to employees for the purchase and maintenance of specific articles of employer-required uniforms. The allowances are not taxable to the employees provided that the uniforms are not adaptable to general use, and are not worn for general use. In addition, the employees must substantiate the expenses. If the employer does not require substantiation, the allowance is taxable as wages and subject to withholding when paid.
Example: An agency is required to reimburse certain employees for shoes under a union contract. The shoes are not safety shoes. If the shoes are not safety shoes and are adaptable for general wear, the reimbursements are included as wages to the employees even if the employer is required to make the payment

Sandy

[New York Enrolled Agent]

ok, we all agree that he SHOULD be putting his business name on the shirts, etc. But none of you have answered my question if he can make a business decision to pay for his employee's uniforms/work clothes if he chooses.

Linda, EA

IMO, absolutely he could take the deduction - however that conclusion is based on the assumption he reports the value of the clothing as additional compensation to the employees. I don't think that under the facts you post that you can escape the fact that the clothes constitute compensation and are wages under §3121(a).

[kpangelinan]

ok, we all agree that he SHOULD be putting his business name on the shirts, etc. But none of you have answered my question if he can make a business decision to pay for his employee's uniforms/work clothes if he chooses.

Linda, EA

Yes, I would....I just went through an audit, which went to Tax Court and was settled by an appellate RO with myself. Similar situation to yours and was accepted.

I'd take the deduction Linda.

IMO, absolutely he could take the deduction - however that conclusion is based on the assumption he reports the value of the clothing as additional compensation to the employees. I don't think that under the facts you post that you can escape the fact that the clothes constitute compensation and are wages under §3121(a).

Agreed.

[taxea]

just because he pays for them doesn't make them deductible. the IRS rules are very clear. So you use a sharpie to put the name on the shirt...are you also going to write it across the butt of the pants. I don't think this is what the IRS had in mind.
If he wants to cut corners then why require the employees to all wear the same thing. Let them wear their own clothing. That will solve his problem.