What can a commissioned retail salesperson deduct?
April 4, 2007 12:12 PM Subscribe
My mom is a commissioned retail salesperson for Gucci. Because she gets $13k/yr. in alimony, she always owes when she does her taxes. If she itemizes this year, what could she deduct?
Hair/nails? Makeup? Magazines? Dry cleaning? Jewelry? Any info would be appreciated. We're trying to figure out whether to just let me do her taxes online as I have done in the past, or if there is a possibility of her not owing the IRS $200/month by itemizing.
Also, are her credit card statements good enough for receipts?
Thank you.
Hair/nails? Makeup? Magazines? Dry cleaning? Jewelry? Any info would be appreciated. We're trying to figure out whether to just let me do her taxes online as I have done in the past, or if there is a possibility of her not owing the IRS $200/month by itemizing.
Also, are her credit card statements good enough for receipts?
Thank you.
Why doesn't your mother just set aside the relevant percentage of her alimony payments each month?
Also, are her credit card statements good enough for receipts?
Doubtful- a CC statement only shows a location, time, and amount, not what you actually bought.
posted by mkultra at 12:41 PM on April 4, 2007
Also, are her credit card statements good enough for receipts?
Doubtful- a CC statement only shows a location, time, and amount, not what you actually bought.
posted by mkultra at 12:41 PM on April 4, 2007
Maybe your mom isn't having the proper amount taken for taxes.
I itemized for the first time several years ago. The standard exemption was pretty close even with my mortgage interest, etc. She is probably better off with just the standard deduction. It was over 5000 last year-- so if you think she has over 5000 dollars worth of deductions it might be worth looking into. If not, standard is probably the better route.
I am pretty sure NONE of those items are legally deductable or my boyfriend's very thorough CPA would have brought these up. He's a commisioned salesman, too. Well, not the make up of course.
But when you mention magazines it made me think- does she have some kind of retail place out of her home?? Where would these magazines be?
posted by beccaj at 12:50 PM on April 4, 2007
I itemized for the first time several years ago. The standard exemption was pretty close even with my mortgage interest, etc. She is probably better off with just the standard deduction. It was over 5000 last year-- so if you think she has over 5000 dollars worth of deductions it might be worth looking into. If not, standard is probably the better route.
I am pretty sure NONE of those items are legally deductable or my boyfriend's very thorough CPA would have brought these up. He's a commisioned salesman, too. Well, not the make up of course.
But when you mention magazines it made me think- does she have some kind of retail place out of her home?? Where would these magazines be?
posted by beccaj at 12:50 PM on April 4, 2007
IANATL (I am not a tax lawyer), and IANYL, but I did get an A for Tax in law school. IIRC, a good rule of thumb was that items that basically any employed person would incur, that are just a natural part of working (anywhere) do not result in definsible, legitimate deductions. So, my Metrocard (for the normal commute everyone has distinguised from a travel expense deduction), drycleaning, eating food so you can live to go to work, your lunch when you just hang around the office, buying suits to wear to work, are just NOT deductions that won't kill you on an audit. Again, IIRC (and I may not) there may be case law where some maverick has tried to claim these and gotten nailed. Yeah, these are expenses and it sucks, but...they are not deductions.
I could be failing to get something obvious here, but alimony is typically taxed to the recipient these days (which makes more sense than taxing the payor), so you do realize that she has to pay income tax on the alimony no matter what? She owes because she's paying the tax on all the alimony at once - something like making a quarterly estimated payment might reduce if not the total tax owed but at least the onerous burden of coming up with the all tax owed in one big chunk all year and not getting a nice refund like everyone else.
I could be wrong, or as is really likely, just incredibly conservative on these matters.
posted by bunnycup at 12:56 PM on April 4, 2007
I could be failing to get something obvious here, but alimony is typically taxed to the recipient these days (which makes more sense than taxing the payor), so you do realize that she has to pay income tax on the alimony no matter what? She owes because she's paying the tax on all the alimony at once - something like making a quarterly estimated payment might reduce if not the total tax owed but at least the onerous burden of coming up with the all tax owed in one big chunk all year and not getting a nice refund like everyone else.
I could be wrong, or as is really likely, just incredibly conservative on these matters.
posted by bunnycup at 12:56 PM on April 4, 2007
I am not an accountant or a tax expert. However, as I understand it, deductible expenses have to be related to your business and I don't think that hair, makeup, nails, jewelry, magazines, etc. can be written-off. Construction workers, etc. can write of their work boots and other uniform-type articles, but they have to adhere to a specific standard. While looking good might be necessary for your mom's job, specific beauty routines and treatments are not required. If Gucci requires their salespeople to wear only Gucci clothing (but does not provide the clothing or reimburse them for the clothing), it is possible that she can deduct that, but this is only an assumption on my part she needs to get professional advice.
Also, I don't know if this will help much, but she might be able to offset the implied-yet-not-required costs of her job (jewelry, clothing, shoes) by regularly cleaning out her closet and donating the "last season" stuff to charity. Maybe she can even offset magazine subscription fees by donating the magazines to charity (I don't know what kind, retirement homes? children's hospitals? not sure) when she is done reading them. That might be a big stretch though. Again, these are all guesses. She really needs to consult a professional for tax advice.
posted by necessitas at 1:30 PM on April 4, 2007
Also, I don't know if this will help much, but she might be able to offset the implied-yet-not-required costs of her job (jewelry, clothing, shoes) by regularly cleaning out her closet and donating the "last season" stuff to charity. Maybe she can even offset magazine subscription fees by donating the magazines to charity (I don't know what kind, retirement homes? children's hospitals? not sure) when she is done reading them. That might be a big stretch though. Again, these are all guesses. She really needs to consult a professional for tax advice.
posted by necessitas at 1:30 PM on April 4, 2007
IANYTL, and this is not tax advice. Seek your own tax advice from a professional, based on your circumstances, can't avoid penalties, Circular 230, blah blah.
The hornbook case on this is called Pevsner v. Comm'r (you can google it), in which the taxpayer was a manager of an Yves St. Lauren boutique who tried to deduct the cost ($20K/year in 1973) of her designer suits. She said she would not have worn any of it had she not been employed by YSL. The deduction was denied, and the court cited a test from a prior case that determined The "the deductibility of clothing expenses is that the cost of clothing expenses is deductible as a business expense only if: (1) the clothing is of a type specifically required as a condition of employment, (2) it is not adaptable to general usage as ordinary clothing, and (3) it is not so worn."
I would think that factors 2 and 3 would generally be hard to satisfy unless one were talking about a Burger King uniform or a chicken suit--and in each case, the taxpayer wears them only at work (and not ironically on the taxpayer's day off, or to a Halloween party, etc.).
Consult your tax adviser. Again, this is not tax advice to you or your momma.
posted by Admiral Haddock at 1:54 PM on April 4, 2007
The hornbook case on this is called Pevsner v. Comm'r (you can google it), in which the taxpayer was a manager of an Yves St. Lauren boutique who tried to deduct the cost ($20K/year in 1973) of her designer suits. She said she would not have worn any of it had she not been employed by YSL. The deduction was denied, and the court cited a test from a prior case that determined The "the deductibility of clothing expenses is that the cost of clothing expenses is deductible as a business expense only if: (1) the clothing is of a type specifically required as a condition of employment, (2) it is not adaptable to general usage as ordinary clothing, and (3) it is not so worn."
I would think that factors 2 and 3 would generally be hard to satisfy unless one were talking about a Burger King uniform or a chicken suit--and in each case, the taxpayer wears them only at work (and not ironically on the taxpayer's day off, or to a Halloween party, etc.).
Consult your tax adviser. Again, this is not tax advice to you or your momma.
posted by Admiral Haddock at 1:54 PM on April 4, 2007
St. Laurent. Oops. This is not spelling advice. Consult your own dictionary.
posted by Admiral Haddock at 1:54 PM on April 4, 2007
posted by Admiral Haddock at 1:54 PM on April 4, 2007
I'm not a tax attorney so heed my advice at your own risk: She should be able to deduct the subscriptions of trade magazines she subscribes to. If she uses her cellphone for work she can deduct part of her monthly bill. She can write off a palm pilot or computer she uses for work as well.
posted by any major dude at 2:54 PM on April 4, 2007
posted by any major dude at 2:54 PM on April 4, 2007
Be careful though, I dont think she can write off a palm pilot or computer she "uses for work," I believe technically it needs to be used "exclusively for work". I am sure there is someone more knowledgable than I who can provide a better sense of that answer, but I don't suggest playing fast and loose with that since an auditor would have a very easy time on that one.
posted by bunnycup at 3:03 PM on April 4, 2007
posted by bunnycup at 3:03 PM on April 4, 2007
if she uses it 50% for work and 50% for personal use can she deduct half?
posted by any major dude at 6:06 PM on April 4, 2007
posted by any major dude at 6:06 PM on April 4, 2007
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posted by mr_roboto at 12:15 PM on April 4, 2007