Most, if not all, professional actors, actresses, and television personalities incur certain expenses to maintain their appearances. These expenses may include, but are not limited to, the cost of make-up, hair styling, and certain clothing purchases. Entertainment industry tax deductions are therefore important to understand.
Since this maintenance is often required due to the nature of these entertainers’ careers, many believe that expenses of this nature are fully or partially tax-deductible. However, others believe that such expenses are inherently personal, not business-related, and thus not deductible. The following article will explore which of these expenses are tax deductible and which fall under personal expenses.
The IRS states that:
“Taxpayers in the entertainment industry sometimes may incur expenses to maintain an image. These expenses are frequently related to the individual’s appearance in the form of clothing, make-up, and physical fitness. Other expenses in this area include bodyguards and limousines. These are generally found to be personal expenses as the inherently personal nature of the expense and the personal benefit far outweigh any potential business benefit.
No deduction is allowed for wardrobe, general make-up, or hairstyles for auditions, job interviews, or “to maintain an image”.”
In other words, the IRS considers make-up, hair styling, and similar expenses that are incurred in attempts to secure a certain job (auditions and interviews) to be personal expenses.
However, note that the IRS does not categorically state that all make-up, hair-styling, and similar expenses are personal in nature – it says they are “generally found” to be personal expenses. So when would these expenses be considered business-related, and thus deductible?
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In one Tax Court case, an active actress and model attempted to deduct the cost of clothing, hair preparation, cosmetics, and similar expenses. She was indeed engaged in the business of acting and modeling, as she had an agent and had acted in plays, commercials, television shows, and movies. Nevertheless, the court concluded that “clothing that is suitable for general or personal wear does not qualify as a business expense”, and that “expenses related to hair salon visits and cosmetics are inherently personal expenses”. As a result, her entertainment industry tax deductions were disallowed.
In another Tax Court case, an individual actively employed as a television anchor attempted to deduct the cost of grooming, teeth whitening, skin care, manicures, contact lenses, and makeup. The court simply stated that “expenditures for manicures, grooming, teeth whitening, and skin care are inherently personal expenditures” and thus not deductible.
However, the entertainment industry tax deductions for contact lenses and makeup were treated differently.
The anchor argued that she used a different contact lens prescription for business use than personal use due to her need to read a teleprompter. The court disallowed the deduction for the contact lenses anyway, but did so because “she presented no credible evidence that she was required to and did obtain an additional prescription for work”. As a result, if another taxpayer did provide evidence that a different prescription was required for business reasons, the cost of the business-purpose contact lenses (or glasses) could potentially be deducted as a business expense.
The anchor then argued that her makeup was designed for use on television. However, the court disallowed the deduction for the makeup, because her receipts do not “indicate purchases for special makeup designed for on-camera use but simply indicate purchases for ordinary makeup suitable for everyday wear […and the] Court is unable to determine whether the makeup she purchased was primarily for business use”. As a result, if another taxpayer did provide evidence that:
a) purchased makeup was designed for on-camera use and not suitable for personal use, or
b) the makeup was purchased primarily for business use,
the cost of the makeup could be potentially deducted as a business expense.
Ultimately, whether an actor, actress, or television personality currently has a job in the entertainment field or not, his or her hair salon, skin care, and other “personal maintenance” expenses are never deductible because they are inherently personal.
But when a taxpayer has a job or business that requires purchase of makeup, contact lenses, and similar items, they may indeed be deductible as business expenses if:
a) the purchases are not appropriate for everyday personal use, or
b) the purchases can be proven to have been purchased primarily for business use.
Note, however, that this situation has not yet been officially decided by a court or by the IRS. As a result, you should consult an Atlanta tax accountant and discuss your specific situation if you are considering taking this deduction.
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