Have you heard rumors of influencers writing off their entire wardrobes as work expenses? What about wondering if that ballgown was tax-deductible? How do our favorite YouTubers file their taxes when it comes to the clothing they use for the job?
YouTubers can write off clothes if they are only used for work and are essential to the image of the YouTuber. If the clothing can be considered a uniform of some kind, like a formal outfit for a specific work event, a themed t-shirt worn in every video, or a cosplay, it could be tax-deductible.
That’s the short answer. The long answer, which will be continued below, can also be summarised as “be cautious.” Keep reading for more details on how YouTubers can get their tax returns without annoying the IRS!
Tax Write-offs that a YouTuber Might Use
A tax write-off, also referred to as a tax deduction, is a legitimate expense that can be counted as a deduction or a credit that lowers your taxable income. If you have a lower income, you pay less in taxes. These deductions can add up to something pretty substantial when you’re running a YouTube channel and are self-employed.
Some things that may be tax-deductible for a YouTuber include:
- Home office expenses
- Job related expenses
- Charitable contributions
- Medical, dental, prescription drugs, and health care costs
It is important to remember that, while all these could be considered work expenses, none of them are tax-deductible unless the appropriate paperwork is filled out! Someone unfamiliar with taxes might want to consult an accountant or tax service when filing so that everything is legal and safe. No temporary deduction is worth a large fine or jail time. Make sure the money saved stays yours!
What Clothing Can Be Written Off?
Now we can talk about this in more detail! What clothing can be written off? Can any clothing worn on the job be considered a business expense? If you want a nice suit for a date later, would wearing it for a YouTube video make it tax-deductible? What about those shoes you’ve been dying to buy?
No! None of those things will count as a tax-deductible business expense. Just like a restaurant server can’t write off a pair of black jeans as a job-related expense, and a TV Newscaster can’t write off her dresses as a job-related expense, you cannot wear random clothing on YouTube and hope to get it written off. This makes sense since society agrees that people can’t just walk around naked and need to buy clothes, no matter what their jobs are.
The IRS may be busy, and they may be unlikely to care about small expenses being written off like this, but it’s still better to play it smart.
This is why clothing essential to your image as a YouTuber is considered tax-deductible. It needs to contribute to your business in a meaningful way if you want to write it off as a business expense. This can get complicated, which is where accountants come in. Some of the information in this article originated with The Showbiz Accountant, who specializes in helping influencers and YouTubers understand tax laws around their work.
What Are Some Examples of YouTuber “Uniforms?”
What defines a work uniform? How does something become distinct enough to become tax-deductible? Creativity is an option!
An easy example of YouTubers who could write off their wardrobe is Cosplay Creators. These cosplay outfits clearly cannot be worn in normal society on a regular basis and are only made for work. It would be more than a little confusing to see the Mario Brothers standing in line at the bank, or to see Batman and Robin in the grocery store.
This brand of YouTubers focuses their channel around creating costumes that can be very expensive. They then wear these costumes to work events like meet-and-greets or comic conventions. Some will cross over with gaming Youtube or live streaming channels, making the cosplay their gaming uniform.
The Trademark Look
Less extreme examples include YouTubers who wear the exact same hat in every video, making the hat part of their trademark look. Other YouTubers may wear the exact same style of red flannel so often that it can be used as a recognizable Halloween costume. If it turns into a classic look that is tied to their job, helps them promote themselves, and is a character look, it can count as a work expense.
Other YouTubers may wear their own merchandise, which they’re trying to advertise and sell. This is another area to be careful with, since the clothing could easily be seen as street clothing by the IRS, but it can also be seen as branding and advertising! The YouTuber should be sure to specify what they’re doing, that they’re advertising (this also helps avoid problems with the Federal Trade Commission), and that the item of clothing is part of their merchandise.
This is a way that many fashion or other YouTubers can write off clothing as a business expense, or at least make a profit.
With affiliate marketing, a YouTuber or other influencer can earn a commission by promoting a product or service sold by somebody else. For example, a parenting channel might be offered an affiliate link for a specific brand of maternity dress. The YouTuber in question would wear the dress, say they’re advertising the dress, promote the dress, and provide the affiliate link in the video description and in the video itself. When a viewer clicks that link and/or makes a purchase, the YouTuber receives a portion of the profits.
With this process, the outfit is very clearly necessary for work. It is being actively used to make the product and advertisement! Without the outfit, the video ad advertisement could not exist. This makes it distinct from other fashion blogged items that may get views, but don’t have that added layer of insurance.
When In Doubt
When in doubt, it’s better not to try and claim the tax deduction. No write-off is worth jail time. Don’t let that scare you off completely, though! Many YouTubers and influencers are able to take advantage of these deductions that are designed to make work easier and more accessible. Learn the laws, get some legal advice, and go save some money!