Debunking Tax Deduction Myths
00:00:00.000 | a licensed tax preparer, is saying, "I deduct all my haircuts because they're my brand."
00:00:05.040 | And he's like, "Well, I deduct my blue suits because blue is my brand."
00:00:08.720 | And that's your perfect example of he's saying he's relying on IRC 162, which is our classic
00:00:15.360 | ordinary necessary business expenses. So you go there and you say, "Okay, yeah,
00:00:18.320 | well, it says ordinary necessary business expenses." The mistake he's making is he's
00:00:22.640 | looking at it and saying, "I think it's ordinary necessary to my business."
00:00:27.200 | It's literally just made up in his mind when obviously what we want to do is go to the tax
00:00:31.360 | law. So then what do we do? We look at treasury regulations. For this one specifically,
00:00:34.960 | it doesn't help us. So then we go to court cases. The court cases say, "That's cute,
00:00:39.600 | but you're going to get a haircut anyways." They say personal grooming. It's so inherently
00:00:44.800 | personal. It can't be for business purposes. And then we get that same result for clothing.
00:00:49.600 | There's actually a three-part tax court test for clothing. And so the one that everyone violates
00:00:54.400 | is it can't be suitable for personal use, even if you only use it for business.