Find Out What You Can do on Your Taxes

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There are lots of tax advisors out there. I'm not discussing legitimate tax pros; I'm discussing individuals you run over in your life who bestow their unsolicited tax "knowledge" regarding taxation services for the fashion and apparel business. You know- - your neighbor, your hairdresser. your best companion. Of course, there are many individuals who could really know what they are referring to, yet this wisdom is to be taken as one would take clinical, legal, or investment advice from non-professionals in those fields.

Throughout the long term, we've needed to correct this misinformation, usually after a customer has gotten a terse notice from the IRS asking to approve some information in regard to their return. While numerous examples of awful information are being passed along, some have bounced into the "urban legend" category, and show up in our offices more than others.

Also Read: What is TAX ACCOUNTING

Here is one mistake we've seen again and again:

Professional (read: Expensive) clothing for work.

A couple was brought into a radio show to discuss a disagreement on the spending habits of the spouse for a new business venture. As a new real estate agent, she had confidence in the "Dress for Success" philosophy and purchased an enormous number of expensive outfits.

One of her arguments was that she could write off the clothes as a business expense. She is in good company to believe that this is a legitimate expense. One of our clients who was a principal at a center school was persuaded that because his suits were necessary for his job, they were deductible. Another accountant let him write off his wardrobe as well as his dry-cleaning. This was incorrect.

You need to consider it according to the IRS's point of view and the probability of abuse. In most work environments, you need to wear clothes. On the off chance that everybody could purchase expensive clothes (or the entirety of their clothes) and write them off, it would be an easy method for cutting into your profit and lowering your tax liability, thus dodging settling more in taxes.

3 Simple Tips for What You Can Do -

1. The work necessity test. The IRS position states that assuming the clothes you purchase are expected for work (protective clothing, uniforms, and so on), they can be deductible as a work-related expense. These are the clothes you wouldn't normally wear outside of work. For instance, on the off chance that you are expected for your job to wear a uniform, Kevlar vest, or steel-toe boots for safety, they are deductible despite the fact that you could technically wear them in different places.

Positively you could show up to a party in a bulletproof vest or restaurant uniform, yet it's not usually finished. Neither the IRS nor I can assist you with that wardrobe decision.

2. The branding test. An easy method for deciding whether clothing is deductible is assuming there is any sort of business branding on it, such as a logo. So, for instance, the principal of a school can't write off his suits unless they are embroidered with the school's name or mascot on the label.

Then again, on the off chance that your work requires you to wear a black turtleneck and khakis, with no logo, you can't write off those items because they can be used for consistent wear. Once more, the IRS would contend there is an excess of space for fraudulent deductions with taxpayers writing off clothes they would purchase at any rate.

3. The dry-cleaning test. You can deduct your dry-cleaning for clothes that satisfy the work necessity guidelines. This is a derivation that is regularly missed or misunderstood. So for our radio guest expecting to write off cleaning on her expensive suits, unless she embroiders her company logo onto her clothing, she's stuck between a rock and a hard place.

Whenever you are "advised" by a self-proclaimed tax expert, ensure you confirm the information. Dress for Success could get you that promotion, however, unless you observe the guidelines, it will just cross paths with the IRS. For further details, you can count on Global FPO to provide you with the best taxation services for fashion and apparel in Colorado, Boston, Virginia, and most other parts of the U.S.A.

Tags: tips for taxation, tax preparation service, fashion and apparel business

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