A taxing question on Palin’s clothing allowance
Sarah Palin’s $150,000 clothing allowance from the Republican National Committee raises questions about whether John McCain’s vice presidential pick will have to pay federal income taxes for the items she bought with the money.
Maybe, according to one congressional tax expert.
The McCain campaign says the clothing, which according to Politico.com was purchased at stores like Neiman Marcus and Saks, will go to charity after the campaign.
If everything is handed over to charity once the last ballot is cast, Palin could argue that she never actually owned the clothes and that they were more like costumes or uniforms used for work, the tax expert said.
But anything she keeps would be considered a payment and its value could be taxed as income.
Generally clothing required for work that cannot also be used outside the workplace, such as a nurse’s uniform, is a deductible expense. Any clothing that can be used off the job as well as on the job cannot be deducted.
Photo credit: REUTERS/Steve Marcus (Palin at a rally in Henderson, Nevada Oct. 21)