Tax

Taxpayers often assume that clothing purchased for work qualifies as a tax deduction. The tax law takes a much narrower view. 

As a general rule, the IRS does not allow a deduction for work clothing if it serves as everyday streetwear. This rule applies even when a taxpayer buys the clothing solely for work and never wears it outside the job.

Business suits, skirts, dresses, and other professional attire do not qualify for a deduction. Casual work clothing, such as khaki pants, plain shirts, or everyday boots and shoes, also fails the test. The IRS never allows a deduction for watches, regardless of business use.

The law allows deductions only for clothing that clearly does not function as everyday wear. 

Required uniforms that identify an employer and lack personal utility qualify for a deduction. Airline pilot uniforms, professional sports uniforms, and required nursing uniforms meet this standard. Protective gear required for safety also qualifies. Electricians may deduct safety shoes that protect against electrical hazards, and truck drivers may deduct insulated coveralls, steel-toed boots, gloves, and safety glasses used exclusively for long-haul work.

Specialized apparel also qualifies when it serves a specific job function and does not adapt to personal use. Hospital scrubs, grease-stained mechanic overalls, and custom performance costumes fall into this category. Promotional clothing may qualify as well when the employer requires it, marks it with a logo, and restricts it to business use. 

When clothing qualifies for a deduction, related laundry and dry-cleaning costs qualify too.

Independent contractors may deduct qualifying work clothing on Schedule C as an ordinary and necessary business expense, provided they keep proper records.

Employees face a different rule. The tax law permanently eliminated deductions for employee work clothing. Employees should instead seek reimbursement from their employer. 

When an employer reimburses these costs under an accountable plan, the employee receives the payment tax-free, and the employer claims the deduction. 

If you want to discuss deductible work clothing, please call me on my direct line at 408-778-9651  

• By Leon Clinton
• January 13, 2026

Many taxpayers panic when they hear the term “depreciation recapture” and decide to skip depreciation on a home office to avoid future tax. 

That strategy usually backfires. The tax law creates unexpected consequences when you claim zero depreciation, and those consequences often cost more than the recapture tax you tried to avoid.

When you skip depreciation, the IRS applies the allowed-versus-allowable rule. The depreciation you claimed counts as the “allowed” amount. The depreciation you should have claimed counts as the “allowable” amount. If you claimed zero depreciation but should have claimed $5,000, the tax law treats those amounts as different. That difference creates two problems.

First, you lose real tax deductions today. By skipping $5,000 of depreciation, you voluntarily increase your current tax bill. 

Second, the tax law still treats the $5,000 as depreciation when calculating your gain on sale. That $5,000 reduces your basis in the home, which can increase your taxable gain later. In the wrong situation, you pay tax twice: once by losing the deduction and again through a higher gain.

The good news is that your prior tax returns protect you from depreciation recapture if you claimed zero depreciation. Section 1250(b)(3) allows you to use the amount actually claimed when calculating recapture. Your home-office deduction Forms 8829, which show zero depreciation, serve as adequate records. As a result, you avoid the unrecaptured Section 1250 gain tax on depreciation you never claimed.

But the law does not extend that same relief when you compute gain on sale. For taxable gain purposes, the IRS requires you to reduce your basis by the allowable depreciation, even if you never claimed it. That rule can push your gain above the Section 121 home-sale exclusion and trigger capital gains tax.

Despite this complexity, skipping depreciation rarely makes sense. Depreciation delivers immediate tax savings and valuable cash-flow benefits. The recapture rate often runs lower than your current income tax rate. You can also defer recapture through a Section 1031 exchange or eliminate it entirely with a step-up in basis at death.

The bottom line remains simple: Do not skip home-office depreciation. Claim the deduction, use the tax savings now, and plan intelligently for the future.

If you want to discuss home-office depreciation, please call me on my direct line at 408-778-9651  

• By Leon Clinton
• January 9, 2026

Your tax refund will no longer arrive by paper check. The IRS recently announced that it will stop issuing refund checks, with limited exceptions, and will require taxpayers to receive refunds electronically.

Why the Change?

Paper checks cost more, create security risks, and take much longer to process. In addition, the Trump administration directed all federal agencies to eliminate paper check payments.

What Stays the Same?

The IRS has not changed the process for filing your tax return. You will continue to file exactly as you do now.

How to Receive Your Refund

The fastest and most reliable way to receive your refund is through direct deposit into your bank account. Ninety-three percent of taxpayers already use direct deposit, and this change will not affect them.

If you currently receive refund checks, switch to direct deposit when you file your 2025 return. Simply enter your bank’s routing and account numbers on your tax form.

If you prefer not to use direct deposit, you can choose certain mobile apps or prepaid debit cards that provide a routing and account number.

The IRS will still issue a paper check if you request a waiver because you lack access to banking services or electronic payment systems. Keep in mind that paper checks take at least six weeks to process, while electronic refunds typically take about 21 days.

If You Need a Bank Account

You can open an account online through several resources:

• The FDIC’s GetBanked website
• The National Credit Union Administration’s Credit Union Locator
• The Veterans Benefits Banking Program (for veterans only) 

Paying Taxes

For now, the IRS will still accept tax payments by check. However, electronic payments remain the faster and more reliable option. To review all electronic payment methods, visit the IRS Make a payment web page.

If you want to discuss tax payments and refunds, please call me on my direct line at 408-778-9651  

• By Leon Clinton
• January 6, 2026