Tax Brief: Deduct Job Expenses
Editor's Note: This article is part of our 2014 Tax Tips series. Robert Flach is an expert with more than 40 years of experience as a tax professional and also blogs as The Wandering Tax Pro.
NEW YORK (MainStreet) You can deduct as a Miscellaneous Expense on Schedule A, subject to the 2% of Adjusted Gross Income exclusion, "ordinary and necessary" expenses required to carry out the job for which you were hired and for which you have not been reimbursed by your employer under an "accountable plan". "Ordinary" expenses are common and accepted in your line of work, and "necessary" expenses are appropriate and helpful to your job.
If your employer pays you a flat weekly or monthly "expense allowance," and you are not required to account to the employer for your actual expenses or to return any excess allowance, the amount you receive is included in your taxable W-2 wages and you can deduct all your appropriate job-related expenses.
Deductible job-related expenses include -
- Computer hardware and software required by your employer as a condition of employment and not merely for your own convenience.
- Education required by an employer, by law, or by government regulation, or which maintains or improves skills required in your current trade or business. You cannot deduct education if it is the minimum requirement for a trade or business or prepares one for a new trade or business.
- Small tools and supplies used on the job.
- Travel and entertaining of clients, including business use of your car at 56.5 cents per mile meals are only 50% deductible.
- Uniforms and work clothes required as a condition of employment and not adaptable to everyday wear, and safety or protective clothes or equipment.
- Union and professional dues and assessments.
If you claim deductions for travel or meal and entertainment expenses, or if you are partially reimbursed, you must first report the expenses on IRS Form 2106 or 2106-EZ and carry the total over to Schedule A.
--Written by Robert D. Flach for MainStreet