Can You Take A Haircut Tax Deduction?
After you calculate your self-employed taxes and seeing how much you'll owe to Uncle Sam, you may be wondering...
Can I write off haircuts? Yes, taxpayers can write off haircuts from their taxable income. It is rare but true. The Internal Revenue Service approves tax deduction on maintaining and changing your personal appearance in certain circumstances. Although rules for deducting the costs of those makeup and hair cut tax deduction are very strict. The key question to ask yourself is whether you would still incur without a particular job. In this article, I will address the following topics to explain if any personal appearance expenses are deductible or not from your tax bill.
- What is a personal expense vs a business expense?
- What did some court cases say about personal appearance expenses?
- What’s the special circumstances where personal appearance expenses can be tax-deductible?
- Can an employee vs freelancer write off those expenses?
- What if I’m audited for claiming personal appearance expenses?
Personal Expense vs Business Expense
It is very important to tell the difference between personal expense and business expense. Typical personal expenses that are not deductible are as follows:
- Clothing (other than protective clothing, uniforms and costumes)
- Hair care
- Cosmetic surgery
In most cases, none of the expenses in the above list are deductible. However, if the above expenses need to be in line with industry standards, such as a uniform, and it needs to be essential in order to run your business, they can be claimed as a 1099 business expense. Remember, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. For example, a performer that requires a specific hairstyle for work may qualify as a necessary or ordinary and will qualify as a tax write off.
The U.S. Tax Court has repeatedly ruled that the costs of maintaining an appealing appearance are not deductible.
Hynes v. Commissioner
In a summary of this case, the U.S. Tax Court said an on-air personality’s contract with her TV station that requires a neat appearance “does not elevate these personal expenses to a deductible business expense”
Hamper v. Commissioner
In 2011, the court ruled against a television news anchor, Anietra Hamper, who wanted to claim deductions for the costs of maintaining her personal appearance. The court said “expenses for manicures, grooming, teeth whitening, and skincare are inherently personal expenditures although these expenses may be related to her job”.
What’s the case, then?
If you’re a musician or entertainer who needs to wear theatrical clothing and accessories that aren’t really appropriate for everyday wear, you may be eligible to claim those clothing-related expenses. Models and actresses should also look into these expenses as work-related income tax deductions. Another example is if you work in the science lab and you need to wear protective clothing to avoid radiation exposure, that clothing is deductible. In general, if you’re spending money on clothes and you would not ordinarily wear, and not receiving a wardrobe reimbursement, the expenses could be deductible.
There was a humorous U.S.Tax Court case about work-related clothing. When the IRS disallowed overalls and steel-toed books for a West Virginia welder, he challenged the decision. However, the Tax Court judge noted he was wearing the exact same overall and boots in the courtroom that he was trying to deduct. The judge asked, “are you at work?”
Physical body improvement
The IRS allows certain professionals to deduct expenses related to their physical body appearance. For examples, bodybuilders can deduct the cost of body products such as body oils that they use to improve the appearance of their body. What about athletes? Although they cannot deduct the cost of dietary or nutritional supplements as the benefits are personal as well, they can deduct the cost of sports coaching or training for competitions and events.
Haircare and Haircuts
As you may have heard, The Times reported that Trump deducted $70,000 for the cost of his haircuts and hairstyling for appearances on “The Apprentice” reality show. Also, Trump’s businesses deducted at least $95,464 paid to a hair and makeup stylist of his daughter Ivanka Trump. Many tax professionals are skeptical of the legitimacy of Trump’s personal expense deductions. Technically, hair care and haircuts expenses only qualify as a tax deduction when they are specifically for work-related photo shoots or shows. It has be strictly for work.
Like the clothing and haircuts deduction, you can write off makeup used for stage or photo shoots, but not if you wear the same makeup outside of work. Another important thing to remember is makeup supplies should be purchased from professional suppliers (rather than the drugstore) if you pan to claim the expense.
It is very rare for the cost of cosmetic surgery can be claimed as a tax deduction but there can be specific circumstances where cosmetic surgery can be tax-deductible. Bench, an accounting service company explains an exotic dancer who did breast surgery could claim the cost of breast augmentation. The surgery made her more successful in her profession and she would have her breasts reduced once her stage career is over.
Employee vs Freelancer
Even though there are certain circumstances where these personal-like expenses can be deductible, if you’re an employee vs a freelancer, you cannot claim deduction. Specifically, The Tax Cuts and Jobs Act, which was effect starting 018, eliminated unreimbursed business expenses for employees. However, if you’re an independent contractor or freelancer, you can claim your business-related expenses including home office deductions and car mileage deductions.
Risk of an audit removing personal expenses
You’re very low risk for an audit for personal expenses but this doesn’t mean you can avoid being audited. Additionally, if your return is ever audited and you’re found to be writing off expenses that are personal, it could trigger a further audit for other areas such as reporting lower incomes. When in audit, the personal expenses will likely be removed, and penalties and interest could be levied as well.
Personal appearance deductions such as for haircuts, makeup, or clothing aren’t deductible in a normal situation. For these special personal expenses to be work-related business expenses, you will need to be able to justify your deductions with the IRS. If you know the definition and the difference between personal expenses and business expenses from the IRS perspective, you won’t miss the main point with regards to this personal appearance deduction for your tax returns. If you have any questions or concerns, consult with a tax expert.