One of the most common questions I hear from self-employed individuals begins with the phrase, “Can I write off…?” I’m often surprised by what follows the question.
Sometimes the answer is obvious. Of course, you can write off office supplies. Sometimes the answer is not so clear.
That later situation happened to me recently when a reader, who is a licensed massage therapist, inquired whether or not she can deduct manicures as a business expense. She explained that professionals in the trade must keep their nails trimmed or risk spreading skin infections. She has searched for the answer through IRS-provided resources, but hasn’t been able to find a definitive answer.
My first consideration was whether or not a manicure for a massage therapist would be considered an “ordinary and necessary” business expense. This is the test the IRS uses to determine if a business has a valid write off. Granted, it’s subjective, but it’s all we’ve got. Other than a few mandates here and there, the IRS does not have a definitive list of allowable deductions for business owners. After all, compiling such a list for every industry would be a lengthy and arduous task.
Judgment can be made on extrapolation from other regulations. For example, the IRS disallows a deduction for clothing that is suitable for street wear. I’ve been asked many times, “Can I write off this business suit? I wouldn’t even own a suit but it’s a dress code requirement for work.” The answer is no, you cannot write it off. However, protective gear is deductible: steel toed boots for carpenters, aprons for chefs, head gear for welders, etc. Uniforms are also deductible as are costumes for actors. But personal care: clothing, haircuts and grooming aids for ordinary workers are not.
So what about manicures? A manicure would definitely not be deductible if you got one in order to look good because you are a salesperson since personal grooming is not deductible. But a manicure for a masseuse to prevent the spreading of germs is different, isn’t it? And not mentioned in the question but another consideration would be to keep nails short in order to not rake the client’s skin and leave nasty scratches. This displays business intent.
So I picture myself sitting across from an IRS agent defending the expense and what I hear is: “On the surface, it seems to be a valid deduction. There is a business rather than personal intent. However, your client can clip her own nails.” Well, of course she can and I can clean my own office too, but I’m allowed a deduction for the janitorial service no questions asked. Now what? Will the auditor agree and allow it? Will I have to go to the Group Manager for a decision? Will it be disallowed with a derisive snort?
I can find no court case regarding this specific topic. I’m sure it’s come up in audit more than once with varying results depending upon the circumstances. However, an audit result is not a valid precedent.
I say, in this case, take the deduction. I can see the business intent.
Bonnie Lee is an enrolled agent admitted to practice and representing taxpayers in all 50 states at all levels within the Internal Revenue Service. She is the owner of Taxpertise in Sonoma, Calif., and the author of Entrepreneur Press book, “Taxpertise, The Complete Book of Dirty Little Secrets and Hidden Deductions for Small Business that the IRS Doesn't Want You to Know.” Her new e-book Taxpertise for the Creative Mind Murder, Mayem, Romance, Comedy and Tax Tips for Artists of all Kinds is available at all major booksellers. Follow Bonnie Lee on Twitter and on Facebook.