The term "smart casual" is interchangeable with "business casual". However, smart casual is typically a little more relaxed and depending on the event, you could dare to be trendy and still fit into the category.
For men, the look generally consists of a collard shirt (e.g. dress shirt or polo) with the very top button - and sometimes the one below it - open. The most acceptable pant would be dress slacks or khakis, but again, depending on the event, you could opt to wear dark denim. Your belt should coordinate with your shoes, which could either be loafers, trendy sneakers in good condition or boots. Sport coats are an optional addition; so are neckties, hats and jewelry.
For women, a smart casual look would be a blouse or sweater; slacks, dark denim or a skirt; a (trendy) belt; and for footwear you can run the gamete of heels, boots or flats. Most dresses are acceptable, provided that if it's sleeveless you pair it with a cardigan or jacket. In fact, a cardigan or jacket could be counted as an accessory to add to the polish of your look. The same could be said for jewelry, hairstyling and makeup. Just be sure to keep the additions in-line with a professional look.
If you should ever question whether an outfit falls into the "smart casual" category, you should ask yourself whether you would feel comfortable wearing that very same outfit to work. For this style of dress, you have room to play with combining what you wear to work with what you wear on the weekends to create a cohesive, coordinated ensemble.
Just be smart about it.
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