Have you ever wondered if you should be claiming a tax deduction for your generosity? Or if some business deductions are allowed? Sometimes we claim a deduction in situations we feel are charitable or for a good purpose. Sometimes we try to find validation in our deductions. However, there are IRS regulations on what we are allowed and not allowed to claim. Some of these situations may surprise you, others not so much.
Business Suits, technical sports shirts, evening gowns – I have to wear them for work, can I take a “uniform” or work clothes deduction either as an unreimbursed employee expense or against my business income? Yes and No.
– No, the IRS says clothing must be specifically required by your employer and not suitable for general or personal wear. Most clothes can be worn in day-to-day life. Just because you wouldn’t wear a suit or yoga pants to the local grocery does not make the clothing not suitable for personal wear.
– Yes, if you are a firefighter, law enforcement officer, or if you are required to purchase safety clothing. Additionally, if you can get your business logo embroidered or printed on your shirt it would be considered a business expense.
Thin Mints, Tagalongs, Do-Si-Dos or Trefoils… so delicious and sold by The Girl Scouts of the USA. Can you take a tax deduction for the purchase of the Girl Scout Cookies? Yes and No.
– No, if you keep the cookies, take them home and consume them. You have purchased a product at fair market value, therefore no part of the price is deductible.
– Yes, if you leave the cookies with the Girl Scouts as a donation. Customers not receiving the cookies do not benefit directly from paying for them, therefore you can treat the purchase price as a donation.
5K, Half-Marathon, Marathon, Triathlon race fees … the race is organized to raise funds supporting a local or national charity. Can I deduct the race fee on Schedule A? Yes and No.
– No, if you are paying only the entry fee. The fee covers the cost of the race (including your timing chip, a t-shirt and finisher’s medal), police, permits, security, medical response and hydration. Any additional cost would be considered a hobby cost, unless you are racing to earn income.
– Yes, if you don’t participate in the race or better yet, you contribute extra money over and above the actual race fee. If you can get the race director to tell you, and provide you with a receipt, for the per person cost associated with the race, the amount exceeding the entry fee would be deductible.
GoFundMe accounts are being set up for many individuals that have been subject to tragedy. Can you donate on GoFundMe.com and take the charitable deduction? Yes and No.
– No, as donations to a GoFundMe personal campaign are considered to be personal gifts and are not tax deductible.
– Yes, if you donate to a GoFundMe Certified Charity campaign as these donations will be sent directly to a registered 501(c)3 nonprofit organization.