Question on write-offs and do's and don'ts
Dean ValadezPro Member
Investor · Member since 2023 · 64 posts · 11 votesQuestion on write-offs and do's and don'ts
Most Popular Reply
Accountant · San Diego, CA · Member since 2019 · 1k+ posts · 552 votes
2yQuote from @Dean Valadez:
Can I:
- Purchase clothes (pants, shirts, socks, coats, jackets) that I would wear for doing renovations/rehabs and write them off?
- Shoes, boots?
- atypical tools, such as a knife or flashlights?
- iPads or other such devices? (for documenting properties, drawing rehab ideas on a digital sketchbook, checking Zillow, etc. I know I can do a lot of this on my phone, but an iPad, even the iPad mini, would be easier to view things, and to sketch ideas, etc)
- iCloud storage? (I had iCloud storage for my personal use prior to getting into this field)
I realize the above items can be used for personal use as well, which is why I am asking. What are some things you wrote off, and what precautions should I be aware of?
Also, what are some do's and don'ts for write-offs or for the above questions? I am not trying to 'work the system' but I would like to know what is common/typical to do and what are some write-offs that draw questions/red flags.
For cloths, they need to be cloths that you cant wear outside of work. For instance, a new suit is not a write off, but a uniform for your business is. Tools like knife etc if have a business use you can write off. Same with iPad and cloud software.
Generally, you need tie back a business use for your item in question.
I hope that helps! -Zack
8 Replies
- Accountant · San Diego, CA · Member since 2019 · 1k+ posts · 552 votes2y
Quote from @Dean Valadez:
Can I:
- Purchase clothes (pants, shirts, socks, coats, jackets) that I would wear for doing renovations/rehabs and write them off?
- Shoes, boots?
- atypical tools, such as a knife or flashlights?
- iPads or other such devices? (for documenting properties, drawing rehab ideas on a digital sketchbook, checking Zillow, etc. I know I can do a lot of this on my phone, but an iPad, even the iPad mini, would be easier to view things, and to sketch ideas, etc)
- iCloud storage? (I had iCloud storage for my personal use prior to getting into this field)
I realize the above items can be used for personal use as well, which is why I am asking. What are some things you wrote off, and what precautions should I be aware of?
Also, what are some do's and don'ts for write-offs or for the above questions? I am not trying to 'work the system' but I would like to know what is common/typical to do and what are some write-offs that draw questions/red flags.
For cloths, they need to be cloths that you cant wear outside of work. For instance, a new suit is not a write off, but a uniform for your business is. Tools like knife etc if have a business use you can write off. Same with iPad and cloud software.
Generally, you need tie back a business use for your item in question.
I hope that helps! -Zack - Investor · Member since 2023 · 64 posts · 11 votes2y
Quote from @Account Closed:
Quote from @Dean Valadez:
Can I:
- Purchase clothes (pants, shirts, socks, coats, jackets) that I would wear for doing renovations/rehabs and write them off?
- Shoes, boots?
- atypical tools, such as a knife or flashlights?
- iPads or other such devices? (for documenting properties, drawing rehab ideas on a digital sketchbook, checking Zillow, etc. I know I can do a lot of this on my phone, but an iPad, even the iPad mini, would be easier to view things, and to sketch ideas, etc)
- iCloud storage? (I had iCloud storage for my personal use prior to getting into this field)
I realize the above items can be used for personal use as well, which is why I am asking. What are some things you wrote off, and what precautions should I be aware of?
Also, what are some do's and don'ts for write-offs or for the above questions? I am not trying to 'work the system' but I would like to know what is common/typical to do and what are some write-offs that draw questions/red flags.
For cloths, they need to be cloths that you cant wear outside of work. For instance, a new suit is not a write off, but a uniform for your business is. Tools like knife etc if have a business use you can write off. Same with iPad and cloud software.
Generally, you need tie back a business use for your item in question.
I hope that helps! -ZackThanks, Zack. I do have an LLC. But what are some "don'ts" to the above? In other words, if I purchased some work pants for me to do rehabs, are you saying I can't wear them on non-working days? (I am not talking about suits nor uniforms, but work pants that I use while doing rehabs.) What are write-offs that raise red flags?
Where do such items (clothes, iPads, flashlights, etc) cross too far into non-business use, and does that draw a red flag?
- Accountant · San Diego, CA · Member since 2019 · 1k+ posts · 552 votes2y
Quote from @Dean Valadez:
Quote from @Account Closed:
Quote from @Dean Valadez:
Can I:
- Purchase clothes (pants, shirts, socks, coats, jackets) that I would wear for doing renovations/rehabs and write them off?
- Shoes, boots?
- atypical tools, such as a knife or flashlights?
- iPads or other such devices? (for documenting properties, drawing rehab ideas on a digital sketchbook, checking Zillow, etc. I know I can do a lot of this on my phone, but an iPad, even the iPad mini, would be easier to view things, and to sketch ideas, etc)
- iCloud storage? (I had iCloud storage for my personal use prior to getting into this field)
I realize the above items can be used for personal use as well, which is why I am asking. What are some things you wrote off, and what precautions should I be aware of?
Also, what are some do's and don'ts for write-offs or for the above questions? I am not trying to 'work the system' but I would like to know what is common/typical to do and what are some write-offs that draw questions/red flags.
For cloths, they need to be cloths that you cant wear outside of work. For instance, a new suit is not a write off, but a uniform for your business is. Tools like knife etc if have a business use you can write off. Same with iPad and cloud software.
Generally, you need tie back a business use for your item in question.
I hope that helps! -ZackThanks, Zack. I do have an LLC. But what are some "don'ts" to the above? In other words, if I purchased some work pants for me to do rehabs, are you saying I can't wear them on non-working days? (I am not talking about suits nor uniforms, but work pants that I use while doing rehabs.) What are write-offs that raise red flags?
Where do such items (clothes, iPads, flashlights, etc) cross too far into non-business use, and does that draw a red flag?
So for the clothing, if it was just "a pair of jeans that fit just right" (and a radio :P) It wouldnt be a write off because you can wear that outside of work. However if these jeans had the logo of your company on it, it would count as a write off.
Generally speaking, your being conservative if all your write offs you can tie back to a fair reason why you need them in your business. That new flat screen 60 inch TV you need for "zoom calls" might be a write off if your actually using it for zoom calls. However if you decide to get those new power tools you want on the business credit card and your business is a tax firm like us, its going to be hard to justify to the IRS (and your wife) why it was a valid purchase for tax purposes.
I hope that helps! - Accountant · NH · Member since 2019 · 269 posts · 288 votes2y
I would be wary of "just put your logo on it". There was case relatively recently where one took it to the extreme with a watch purchase, and put their company name on the band - deduction was denied. Also...in example, spending $20 to put your logo on a pair of $60 pants - even if you get the tax deduction, you likely would have had more money in your pocket to just wear normal pants without a logo.
As noted - clothing should not be suitable for everyday wear in order to be a tax deduction. Generally this ends up being allowed deductions for specialized or safety equipment. Medical scrubs / doctor's coat / safety vest / specialized footwear or other safety related gear. In the past there have been fitness instructors denied a deduction for their fitness clothing - while for a purpose, it is also suitable for everyday where. Within reason one could include items branded for business marketing. Going back to ordinary and necessary - if you own just one or two properties and spend thousands on your clothing with your logo on it - may be a bit of a stretch!
- Investor · Member since 2023 · 64 posts · 11 votes2y
Quote from @Account Closed:
Quote from @Dean Valadez:
Quote from @Account Closed:
Quote from @Dean Valadez:
Can I:
- Purchase clothes (pants, shirts, socks, coats, jackets) that I would wear for doing renovations/rehabs and write them off?
- Shoes, boots?
- atypical tools, such as a knife or flashlights?
- iPads or other such devices? (for documenting properties, drawing rehab ideas on a digital sketchbook, checking Zillow, etc. I know I can do a lot of this on my phone, but an iPad, even the iPad mini, would be easier to view things, and to sketch ideas, etc)
- iCloud storage? (I had iCloud storage for my personal use prior to getting into this field)
I realize the above items can be used for personal use as well, which is why I am asking. What are some things you wrote off, and what precautions should I be aware of?
Also, what are some do's and don'ts for write-offs or for the above questions? I am not trying to 'work the system' but I would like to know what is common/typical to do and what are some write-offs that draw questions/red flags.
For cloths, they need to be cloths that you cant wear outside of work. For instance, a new suit is not a write off, but a uniform for your business is. Tools like knife etc if have a business use you can write off. Same with iPad and cloud software.
Generally, you need tie back a business use for your item in question.
I hope that helps! -ZackThanks, Zack. I do have an LLC. But what are some "don'ts" to the above? In other words, if I purchased some work pants for me to do rehabs, are you saying I can't wear them on non-working days? (I am not talking about suits nor uniforms, but work pants that I use while doing rehabs.) What are write-offs that raise red flags?
Where do such items (clothes, iPads, flashlights, etc) cross too far into non-business use, and does that draw a red flag?
So for the clothing, if it was just "a pair of jeans that fit just right" (and a radio :P) It wouldnt be a write off because you can wear that outside of work. However if these jeans had the logo of your company on it, it would count as a write off.
Generally speaking, your being conservative if all your write offs you can tie back to a fair reason why you need them in your business. That new flat screen 60 inch TV you need for "zoom calls" might be a write off if your actually using it for zoom calls. However if you decide to get those new power tools you want on the business credit card and your business is a tax firm like us, its going to be hard to justify to the IRS (and your wife) why it was a valid purchase for tax purposes.
I hope that helps!How do I 'tie' them back to my business? I am looking for specifics as to how to do these things since I am new to this field. Do I keep a record of it somehow, and, if so, what is a recommend way to keep this record?
- Investor · Member since 2023 · 64 posts · 11 votes2y
Quote from @Kory Reynolds:
I would be wary of "just put your logo on it". There was case relatively recently where one took it to the extreme with a watch purchase, and put their company name on the band - deduction was denied. Also...in example, spending $20 to put your logo on a pair of $60 pants - even if you get the tax deduction, you likely would have had more money in your pocket to just wear normal pants without a logo.
As noted - clothing should not be suitable for everyday wear in order to be a tax deduction. Generally this ends up being allowed deductions for specialized or safety equipment. Medical scrubs / doctor's coat / safety vest / specialized footwear or other safety related gear. In the past there have been fitness instructors denied a deduction for their fitness clothing - while for a purpose, it is also suitable for everyday where. Within reason one could include items branded for business marketing. Going back to ordinary and necessary - if you own just one or two properties and spend thousands on your clothing with your logo on it - may be a bit of a stretch!
Thank you for the examples! Your examples and explanations help a lot to clear up the original question, specifically clothing items.
Do you recommend I keep a record, separate from my P&L, of purchases that may be less-than-ordinary, such as a cargo box to carry tools in my truck, or car seat protector covers (to protect my truck seat from getting dirty from tools and other items), etc.? Or would those items possibly be denied as allowed deductions?
- 2yJason WatsonBusiness MemberCPA · Colorado Springs, CO · Member since 2024 · 98 posts · 83 votesAgree with these responses. Any clothing that is suitable for everyday use is not deductible. Logo does not change it unless you can demonstrate that the logo is ordinary and necessary (the underpinnings to any business / rental deduction).
Overall you need to be wary of unreasonableness. Pigs get fed and hogs get slaughtered.
WCG CPAs & Advisors4.5101 Reviews - Accountant · San Diego, CA · Member since 2019 · 1k+ posts · 552 votes2y
Quote from @Dean Valadez:
Quote from @Account Closed:
Quote from @Dean Valadez:
Quote from @Account Closed:
Quote from @Dean Valadez:
Can I:
- Purchase clothes (pants, shirts, socks, coats, jackets) that I would wear for doing renovations/rehabs and write them off?
- Shoes, boots?
- atypical tools, such as a knife or flashlights?
- iPads or other such devices? (for documenting properties, drawing rehab ideas on a digital sketchbook, checking Zillow, etc. I know I can do a lot of this on my phone, but an iPad, even the iPad mini, would be easier to view things, and to sketch ideas, etc)
- iCloud storage? (I had iCloud storage for my personal use prior to getting into this field)
I realize the above items can be used for personal use as well, which is why I am asking. What are some things you wrote off, and what precautions should I be aware of?
Also, what are some do's and don'ts for write-offs or for the above questions? I am not trying to 'work the system' but I would like to know what is common/typical to do and what are some write-offs that draw questions/red flags.
For cloths, they need to be cloths that you cant wear outside of work. For instance, a new suit is not a write off, but a uniform for your business is. Tools like knife etc if have a business use you can write off. Same with iPad and cloud software.
Generally, you need tie back a business use for your item in question.
I hope that helps! -ZackThanks, Zack. I do have an LLC. But what are some "don'ts" to the above? In other words, if I purchased some work pants for me to do rehabs, are you saying I can't wear them on non-working days? (I am not talking about suits nor uniforms, but work pants that I use while doing rehabs.) What are write-offs that raise red flags?
Where do such items (clothes, iPads, flashlights, etc) cross too far into non-business use, and does that draw a red flag?
So for the clothing, if it was just "a pair of jeans that fit just right" (and a radio :P) It wouldnt be a write off because you can wear that outside of work. However if these jeans had the logo of your company on it, it would count as a write off.
Generally speaking, your being conservative if all your write offs you can tie back to a fair reason why you need them in your business. That new flat screen 60 inch TV you need for "zoom calls" might be a write off if your actually using it for zoom calls. However if you decide to get those new power tools you want on the business credit card and your business is a tax firm like us, its going to be hard to justify to the IRS (and your wife) why it was a valid purchase for tax purposes.
I hope that helps!How do I 'tie' them back to my business? I am looking for specifics as to how to do these things since I am new to this field. Do I keep a record of it somehow, and, if so, what is a recommend way to keep this record?
I wouldn't look that deep into it to be honest, if your buying headphones for your work station you don't need to document when your listening to music and when your on zoom. Just write them off as a tech expense and move on :) Your Accountant should be able to assist here with any edge cases or ones your worried about.
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