I mean.. On the other hand, the man who's a plumber isn't using his tools on the weekend. Maybe he fixes his own drain once. He's not calling up his friend being like "hey Bob can I come snake your toilet PLEASE"
If Mario goes to a plumber convention and buys cologne and a suit so he'll look nice giving his presentation - that's a personal expense. Maybe someone out there will say "Mario can't do the presentation nekkid tho!!" Maybe that's true but clothing, personal care is just assumed to be personal use.
Why do you have to bring gender into it, male businessmen use personal care products at work and don't show up nekkid either.
Sure, take male models then. Shall they just wear sweat pants on a photoshoot? What if the client specifically wants to see a Zara Try On Haul? Is the receipt from Zara a personal expense to auditor because the tax code wasn’t written during the attention economy?
And wait a minute, how can u assume the plumber isn’t fixing up his house on the weekend using corporate tools? In fact I bet you that they do lol
I'm going to assume just for arguments sake the client has to purchase the haul themselves - do they not get to pick out what they try on? The justification there is that when people pick out clothes they make their decision for personal reasons like appeal, style, etc and from the IRS perspective any purchase made that has a personal component is 100% personal
"But what about meals? People choose what to eat for personal appeal reasons right? Those are 50% deductable"
You make a good point there! I think the difference is that the meal is one-time use (eaten) & therefore, even though it was made for personal reasons its use is limited to the business lunch it was consumed in. Since clothing can be kept and worn for other times it's seen as more of a personal expense. Maybe that's just a limit of the tax code is that there's no specific provision to account for influencer economy buying multi use personal items for one job only- the assumption is that you will use these items beyond the specific business purpose.
And actually.... I don't know if you're aware. I forget the case name but there was this one adult actress that was able to win her case against the IRS and claimed her breast implants were a business expense. I think her argument was that the implants actually impeded her personal life and therefore weren't made for personal reasons?
I didn’t mention meals. But yea this obviously applies to Male Models and Male Influencers.
They have to pick the clothes they try on, as in a try on haul, because the viewers want to see their opinion. Client sometimes gives u credits to pick clothes but only the top influencers get access to this.
So, small influencers out there: you are on your own.
Honestly thx for the discussion I think I’m just tired of being treated like a second class citizen when we pay more taxes than the average Oil & Gas company or average 1%.
I agree w the judge for the adult actress in this case. The judge must have human empathy that certain auditors don’t lol.
Debatable expense for sure. I have seen male and female realtors who try to expense hair and clothing because appearance is part of the job and it’s rarely accepted.
Your argument that you can’t use makeup and clothing for a trip to the grocery store doesn’t hold water though. I have personally seen Pam Anderson in a grocery store with full makeup and hair wearing a sweater she wore while filming a TV episode. That’s why it’s hard to accept for an expense.
I would think these could be argued that it was part of the ordinary & necessary category of expenses in operating a modeling agency.
You'd just do right to make sure that you keep the products solely for business use and partition them from your personal supplies in the event of a revenue agency inquiry
We do, we have a whole room just to hold the excess clothing. But there is push back from Accountants and Bookkeepers because they are afraid of the tax code
If you feel that you can make the case to support what is “ordinary and necessary”, then the decision is up to the business owner.
There have been plenty of gray areas like this where the business owner understood the risks and was willing to take the chance in an examination.
I don’t know how this would work for makeup, but is there an industry wholesaler you could purchase from instead? One of my clients is a hairdresser and has never has any issue with her purchases from “Salon Resources” or whatever because they’re clearly not retail. (You still need to keep receipts and segregate the makeup from your personal makeup, naturally)
That’s a good idea actually but we can’t. I think maybe in the future we just use our personal credit card and work out a reimbursement. Thx for the constructive idea
From a US tax perspectice, (can't speak to CA) if your appearance is what your business is selling then I see no reason why personal care products wouldn't be at least partially deductible.
I've had some clients that are influences and we've definitely taken the position that things like makeup and clothes are partially deductible.
Makeup is a grey area, but I can say with confidence that you will have a hard time with influencer clothing at audit. The criteria for deductible clothing is very narrow, basically just uniforms, safety apparel, and costumes (which are not available for personal use).
The entire influencer business is a grey area and something we struggled with. For that reason we never went above 25% deductibility for anything in the grey, most was at 10% and we had loads of documentation that the client told us to do this. They were adamant they wanted to take that position.
Perhaps, but this isn't gender bias, it's business "bias" if you want to call it that. A contractor could go to home depot and spend $5k on tools and no one bats an eye. If I do that (as an accountant) there's no way that would be a deductible business expense.
A lot of what you're describing revolves around a clear line between business and personal. With influencers that line is almost impossibly blurred so tax preparers can be very cautious as they're ultimately signing the tax returns and they're assuming some degree of liability over it.
You're not wrong, a lot of business owners use their business expenses/assets for personal use and get away with it all the time. In some ways I do feel that the tax code hasn't necessarily kept up with social-media centric businesses. Because there isn't specific guidance for a lot of these industries, preparers often have to apply rules that were written with traditional businesses in mind and sometimes they make sense, and sometimes they don't.
Costumes are deductible only if they are not available for personal use. Studio wardrobe departments are very dilligent making sure that all costumes and props are accounted for after shooting sessions in part for this reason.
That’s a good point thank you. We have photo and video evidence of the clothing in a separate room, but does the room have to be locked up or something? We can’t prove that u can’t wear 200 pairs of shoes a year like u can’t prove that u don’t own bombs in your house.
I’ll look up more on how film studios account for props thx
I’ve gotten away with expensing lingerie for an OF model, but that might have been due to her putting all used lingerie for sale at ridiculous prices. Sometimes she gets custom requests for specific pieces of lingerie too.
I was going to argue it qualified to be expensed under the Small Business exemption regs for cash basis, but the rev agent didn’t press it too hard surprisingly.
Yes, but there’s nothing stopping from all OF models listing every piece of lingerie for sale as a workaround to deducting the expense.
There’s ways to make deductions compliant for “influencers”.
No "work around" needed in this case. If the lingere was purchased with the intention of reselling it then it is cost of goods sold. If it was purchased as an asset for business use and then later sold, it is reported as a 1231 gain on 4797. If it doesn't qualify as a business asset then it is reported as the sale of personal property on 8949.
So this is exactly what I mean. You can’t personally wear a fancy dress on your personal day to day. Having a personal closet + a seperate clothing studio is akin to a plumber having his own tools in the garage + his personal tool box for his home.
You can’t personally put hours into makeup and care just to make a grocery run.
The reason realtors and influencers keep up with appearances is to gain income. Partially or fully, certainly not personally.
If you know any accountants for influencers please DM me.
As someone else mentioned in this thread, the tax code defines deductible business expenses as those that are "ordinary and necessary" which is, of course, incredibly vague and up to the individual facts and circumstances and the nature of the business.
All that to say, I understand the frustration around what you're describing, but it often ends up being "do I think I could convince an auditor to agree with you?" Sometimes yes, sometimes no.
Not really bias in what determines an expense. Read up on code section 162. 162 just essentially lays out that an expense is ordinary and necessary in the course of business. That can be interpreted in many different ways.
I don’t necessarily agree because it would apply to male and female roles. It’s more of an issue of personal vs. business use and how easy it is to blur those lines. I’d say change your accountants.
If you buy clothes and they stay on set, then they are deductible. That’s all there is to it. It’s part of the business so it’s ordinary and necessary. Same thing goes with makeup.
The issue is when these things are given to people after you are done with them. So if you setup for a film, buy a bunch of clothes and makeup, then use those for 3 months, what happens to the clothes and makeup afterwards? Are they given to employees? If so, then there is a taxable transaction there and you need to report it.
As an individual trying to claim these expenses it is much more difficult to justify. If a model is a 1099 and is hired to attend a party where they are dressed as a sexy tiger, they could deduct the cost of sexy tiger costume and sexy tiger makeup. That’s because they most likely wouldn’t wear the outfit and makeup in their every day life (well some might…).
If the same model is hired to sit on the hood of a car just looking pretty with a nice dress and sexy human makeup then those likely wouldn’t be deductible because they could wear those in their normal life. They don’t want to give a deduction for the clothes and makeup just for the model to use them for business once and then get to own them forever for personal use.
The tax code does a few things:
1. It generates revenue to help the government pay for things.
2. It can be used to discourage socially harmful behaviors. This is called a Pigouvian tax.
3. It can be used to subsidize socially beneficial behaviors.
The reason it's easier for plumbers to expense new tools (a tax subsidy) than it is for actresses to expense makeup is that the government (in my opinion rightfully) views the tools as tangible investment that's socially beneficial. The makeup/hair appointments of a realtor are not socially beneficial.
A more explicit example would be drilling for oil and gas. Drilling makes the cost of energy go down, which the government views as a social benefit (I'm not here to debate climate change), so the tax code provides generous deductions for drilling costs.
The things you're thinking of as "male centric" are probably just tangible investments. Women can also investments in PPE like this. It's frankly a little sexist that your idea of a "female" investment is a pair of yoga pants and a trip to Sephora.
That there is exactly the problem. It is sexist of YOU to assume going to the beauty salon is not a benefit to society or “tangible investment “.
What benefit is there really to drilling oil vs driving consumption via beauty?
Let’s see, both grows jobs, makes GDP graph go up, makes business happen. Oh wait one industry has lobbyists, oops.
Does a plumber need to prove that he doesn’t use his screwdriver for personal use like we need to prove that we don’t use the 1000th pair of white tshirt for personal? Even when we return the items it still triggers because the auditor only sees the expense side.
I just threw in the Male keyword to get your attention, but yes the gender doesn’t matter here.
All I’ll confidently say is that the tax code was likely written by a male dominated group of ye ol boys.
If you can't see why providing cheap energy is more socially important than makeup, I don't really have anything more to say. Most of what you're describing are businesses that are socially harmful trash consumption (realtors, influencers, models etc). If you want to call that the "female economy" then okay.
Ah yes, so u saying digging up oil is on the higher social importance here. Are you sure about this one sir?
I didn’t call it the female economy, but you just called these businesses “socially harmful trash consumption (realtor, influencers, models etc)”.
Alright bro
What, did I strike a nerve in the ol boys club? It’s not about gender, sure. One can also say the tax code is not current to modern times and favors old school traditional businesses which closes off certain female professions.
I mean.. On the other hand, the man who's a plumber isn't using his tools on the weekend. Maybe he fixes his own drain once. He's not calling up his friend being like "hey Bob can I come snake your toilet PLEASE" If Mario goes to a plumber convention and buys cologne and a suit so he'll look nice giving his presentation - that's a personal expense. Maybe someone out there will say "Mario can't do the presentation nekkid tho!!" Maybe that's true but clothing, personal care is just assumed to be personal use. Why do you have to bring gender into it, male businessmen use personal care products at work and don't show up nekkid either.
Stahp, he’s already ded
At least I’m alive inside
Sure, take male models then. Shall they just wear sweat pants on a photoshoot? What if the client specifically wants to see a Zara Try On Haul? Is the receipt from Zara a personal expense to auditor because the tax code wasn’t written during the attention economy? And wait a minute, how can u assume the plumber isn’t fixing up his house on the weekend using corporate tools? In fact I bet you that they do lol
I'm going to assume just for arguments sake the client has to purchase the haul themselves - do they not get to pick out what they try on? The justification there is that when people pick out clothes they make their decision for personal reasons like appeal, style, etc and from the IRS perspective any purchase made that has a personal component is 100% personal "But what about meals? People choose what to eat for personal appeal reasons right? Those are 50% deductable" You make a good point there! I think the difference is that the meal is one-time use (eaten) & therefore, even though it was made for personal reasons its use is limited to the business lunch it was consumed in. Since clothing can be kept and worn for other times it's seen as more of a personal expense. Maybe that's just a limit of the tax code is that there's no specific provision to account for influencer economy buying multi use personal items for one job only- the assumption is that you will use these items beyond the specific business purpose. And actually.... I don't know if you're aware. I forget the case name but there was this one adult actress that was able to win her case against the IRS and claimed her breast implants were a business expense. I think her argument was that the implants actually impeded her personal life and therefore weren't made for personal reasons?
I didn’t mention meals. But yea this obviously applies to Male Models and Male Influencers. They have to pick the clothes they try on, as in a try on haul, because the viewers want to see their opinion. Client sometimes gives u credits to pick clothes but only the top influencers get access to this. So, small influencers out there: you are on your own. Honestly thx for the discussion I think I’m just tired of being treated like a second class citizen when we pay more taxes than the average Oil & Gas company or average 1%. I agree w the judge for the adult actress in this case. The judge must have human empathy that certain auditors don’t lol.
... But why male models?
Debatable expense for sure. I have seen male and female realtors who try to expense hair and clothing because appearance is part of the job and it’s rarely accepted.
Exactly my point thank u
Your argument that you can’t use makeup and clothing for a trip to the grocery store doesn’t hold water though. I have personally seen Pam Anderson in a grocery store with full makeup and hair wearing a sweater she wore while filming a TV episode. That’s why it’s hard to accept for an expense.
I would think these could be argued that it was part of the ordinary & necessary category of expenses in operating a modeling agency. You'd just do right to make sure that you keep the products solely for business use and partition them from your personal supplies in the event of a revenue agency inquiry
We do, we have a whole room just to hold the excess clothing. But there is push back from Accountants and Bookkeepers because they are afraid of the tax code
If you feel that you can make the case to support what is “ordinary and necessary”, then the decision is up to the business owner. There have been plenty of gray areas like this where the business owner understood the risks and was willing to take the chance in an examination.
I don’t know how this would work for makeup, but is there an industry wholesaler you could purchase from instead? One of my clients is a hairdresser and has never has any issue with her purchases from “Salon Resources” or whatever because they’re clearly not retail. (You still need to keep receipts and segregate the makeup from your personal makeup, naturally)
That’s a good idea actually but we can’t. I think maybe in the future we just use our personal credit card and work out a reimbursement. Thx for the constructive idea
From a US tax perspectice, (can't speak to CA) if your appearance is what your business is selling then I see no reason why personal care products wouldn't be at least partially deductible. I've had some clients that are influences and we've definitely taken the position that things like makeup and clothes are partially deductible.
Makeup is a grey area, but I can say with confidence that you will have a hard time with influencer clothing at audit. The criteria for deductible clothing is very narrow, basically just uniforms, safety apparel, and costumes (which are not available for personal use).
The entire influencer business is a grey area and something we struggled with. For that reason we never went above 25% deductibility for anything in the grey, most was at 10% and we had loads of documentation that the client told us to do this. They were adamant they wanted to take that position.
Which shows bias. If it was a film studio, movie set business, but the clothes are just normal clothes for set, wouldn’t that be a deductible?
Perhaps, but this isn't gender bias, it's business "bias" if you want to call it that. A contractor could go to home depot and spend $5k on tools and no one bats an eye. If I do that (as an accountant) there's no way that would be a deductible business expense. A lot of what you're describing revolves around a clear line between business and personal. With influencers that line is almost impossibly blurred so tax preparers can be very cautious as they're ultimately signing the tax returns and they're assuming some degree of liability over it.
But a screw driver or tape can be for personal use right? So we are in the wrong business for tax efficiency haha
You're not wrong, a lot of business owners use their business expenses/assets for personal use and get away with it all the time. In some ways I do feel that the tax code hasn't necessarily kept up with social-media centric businesses. Because there isn't specific guidance for a lot of these industries, preparers often have to apply rules that were written with traditional businesses in mind and sometimes they make sense, and sometimes they don't.
Costumes are deductible only if they are not available for personal use. Studio wardrobe departments are very dilligent making sure that all costumes and props are accounted for after shooting sessions in part for this reason.
That’s a good point thank you. We have photo and video evidence of the clothing in a separate room, but does the room have to be locked up or something? We can’t prove that u can’t wear 200 pairs of shoes a year like u can’t prove that u don’t own bombs in your house. I’ll look up more on how film studios account for props thx
I have a neighbor with the personality of a turtle, I asked her what she wanted to after high school and she said influencer.
I’ve gotten away with expensing lingerie for an OF model, but that might have been due to her putting all used lingerie for sale at ridiculous prices. Sometimes she gets custom requests for specific pieces of lingerie too. I was going to argue it qualified to be expensed under the Small Business exemption regs for cash basis, but the rev agent didn’t press it too hard surprisingly.
If she is selling the lingere then that is cost of goods, not an operating expense.
Yes, but there’s nothing stopping from all OF models listing every piece of lingerie for sale as a workaround to deducting the expense. There’s ways to make deductions compliant for “influencers”.
No "work around" needed in this case. If the lingere was purchased with the intention of reselling it then it is cost of goods sold. If it was purchased as an asset for business use and then later sold, it is reported as a 1231 gain on 4797. If it doesn't qualify as a business asset then it is reported as the sale of personal property on 8949.
There u go, that’s legit accountant here. Pls DM me if u or u know an accountant/ bookkeeper who knows what u know
So this is exactly what I mean. You can’t personally wear a fancy dress on your personal day to day. Having a personal closet + a seperate clothing studio is akin to a plumber having his own tools in the garage + his personal tool box for his home. You can’t personally put hours into makeup and care just to make a grocery run. The reason realtors and influencers keep up with appearances is to gain income. Partially or fully, certainly not personally. If you know any accountants for influencers please DM me.
As someone else mentioned in this thread, the tax code defines deductible business expenses as those that are "ordinary and necessary" which is, of course, incredibly vague and up to the individual facts and circumstances and the nature of the business. All that to say, I understand the frustration around what you're describing, but it often ends up being "do I think I could convince an auditor to agree with you?" Sometimes yes, sometimes no.
Not really bias in what determines an expense. Read up on code section 162. 162 just essentially lays out that an expense is ordinary and necessary in the course of business. That can be interpreted in many different ways.
I don’t necessarily agree because it would apply to male and female roles. It’s more of an issue of personal vs. business use and how easy it is to blur those lines. I’d say change your accountants. If you buy clothes and they stay on set, then they are deductible. That’s all there is to it. It’s part of the business so it’s ordinary and necessary. Same thing goes with makeup. The issue is when these things are given to people after you are done with them. So if you setup for a film, buy a bunch of clothes and makeup, then use those for 3 months, what happens to the clothes and makeup afterwards? Are they given to employees? If so, then there is a taxable transaction there and you need to report it. As an individual trying to claim these expenses it is much more difficult to justify. If a model is a 1099 and is hired to attend a party where they are dressed as a sexy tiger, they could deduct the cost of sexy tiger costume and sexy tiger makeup. That’s because they most likely wouldn’t wear the outfit and makeup in their every day life (well some might…). If the same model is hired to sit on the hood of a car just looking pretty with a nice dress and sexy human makeup then those likely wouldn’t be deductible because they could wear those in their normal life. They don’t want to give a deduction for the clothes and makeup just for the model to use them for business once and then get to own them forever for personal use.
We do have a set and film studio. But it’s a home studio so I suspect it won’t fly. We may as well just kinda stop working so hard lol
The tax code does a few things: 1. It generates revenue to help the government pay for things. 2. It can be used to discourage socially harmful behaviors. This is called a Pigouvian tax. 3. It can be used to subsidize socially beneficial behaviors. The reason it's easier for plumbers to expense new tools (a tax subsidy) than it is for actresses to expense makeup is that the government (in my opinion rightfully) views the tools as tangible investment that's socially beneficial. The makeup/hair appointments of a realtor are not socially beneficial. A more explicit example would be drilling for oil and gas. Drilling makes the cost of energy go down, which the government views as a social benefit (I'm not here to debate climate change), so the tax code provides generous deductions for drilling costs. The things you're thinking of as "male centric" are probably just tangible investments. Women can also investments in PPE like this. It's frankly a little sexist that your idea of a "female" investment is a pair of yoga pants and a trip to Sephora.
That there is exactly the problem. It is sexist of YOU to assume going to the beauty salon is not a benefit to society or “tangible investment “. What benefit is there really to drilling oil vs driving consumption via beauty? Let’s see, both grows jobs, makes GDP graph go up, makes business happen. Oh wait one industry has lobbyists, oops. Does a plumber need to prove that he doesn’t use his screwdriver for personal use like we need to prove that we don’t use the 1000th pair of white tshirt for personal? Even when we return the items it still triggers because the auditor only sees the expense side. I just threw in the Male keyword to get your attention, but yes the gender doesn’t matter here. All I’ll confidently say is that the tax code was likely written by a male dominated group of ye ol boys.
If you can't see why providing cheap energy is more socially important than makeup, I don't really have anything more to say. Most of what you're describing are businesses that are socially harmful trash consumption (realtors, influencers, models etc). If you want to call that the "female economy" then okay.
Ah yes, so u saying digging up oil is on the higher social importance here. Are you sure about this one sir? I didn’t call it the female economy, but you just called these businesses “socially harmful trash consumption (realtor, influencers, models etc)”. Alright bro
I am sure that oil production is of higher social importance than modeling and influencing.
What, did I strike a nerve in the ol boys club? It’s not about gender, sure. One can also say the tax code is not current to modern times and favors old school traditional businesses which closes off certain female professions.