Monday, September 7, 2015


In honor or Labor Day I thought I would post a reprint of my Labor Day 2007 post discussing job-related deductions (I have used updated 2015 info when applicable).

You may also want to get my “Business Expense Guide” for $2.00 from my Tax Deduction Guides page.

I will, as I usually do, be spending Labor Day laboring on tax “stuff”. 

An employee business expenses is an “ordinary” and “necessary” expense of your job. An “ordinary” expense is one that is common and accepted in your trade or profession and a “necessary” expense is one that is helpful and appropriate. An expense does not have to be required by your employer or law to be necessary.

Deductible expenses include:

* Job related use of your car – but not commuting back and forth to work. You can deduct either a proportionate share of the actual costs of maintaining your car or a “standard mileage allowance”, which for 2015 is 57½ cents per mile{54 cents per mile for 2016 - rdf}

* The cost of looking for a job in your present line of work. This includes fees paid to employment agencies and consulting firms for securing a job, preparing a resume or career counseling, the cost of typing, printing and mailing resumes, telephone calls to set up interviews, newspapers and periodicals purchased for employment ads, and round-trip travel or transportation to job interviews, plus lodging and meals (at 50%) if away from home overnight. If you drive you can deduct 57½ cents per mile for 2015. Expenses to look for work in a new trade or field are not deductible; neither are the costs of finding your first job after graduating from school. You do not have to actually get a new job to be able to deduct the expenses.

* The cost of job-related education.  If you use your car to travel to the education you can deduct 57½ cents per mile for 2015 in lieu of actual expenses, plus parking and tolls. You can also deduct registration and travel expenses that relate to attending a job-related annual convention or conference, such as the NJ teacher’s convention usually held each year in Atlantic City or, in my case, the NATP National Conference or the NSTP Annual Convention.

* The cost and cleaning of uniforms and work clothes. To be deductible they must be required as a condition of employment and not adaptable to everyday wear. Items that qualify are uniforms of police officers, firefighters, nurses, transportation workers (air, rail, bus), and professional athletes, special jackets, shirts, ties, etc that feature a company logo (i.e. the gold Century 21 jacket), and special protective clothing such as safety boots, hard hats and work gloves.

* Job-related use of your telephone. This includes the cost of actual local (if identified on the phone bill) and long-distance business phone calls, extra features such as call waiting and call forwarding, and a second phone line in your home used for business. The cost of basic phone service for the primary phone line in your home is not deductible. You can also deduct the cost of a pager and cell phone used for business.  

* Union dues, initiation fees and assessments and dues to professional organizations. You can deduct assessments for benefit payments to unemployed union members but you cannot deduct the part of the assessments or contributions that provides funds for the payment of sick, accident, or death benefits or contributions to a pension fund. You cannot deduct amounts you pay to a union or professional organization that are related to certain lobbying and political activities. The organization will generally report the percentage of dues that are, or are not, deductible.

* Job-related travel and entertainment (see my Business Expense Guide).  

* Small tools and supplies used at work.

Unfortunately job-related expenses, a “miscellaneous” deduction on Schedule A, are deductible only to the extent that your total miscellaneous deductions exceed 2% of your Adjusted Gross Income (AGI). Plus such miscellaneous expenses from Schedule A are not deductible in calculating the dreaded Alternative Minimum Tax (AMT). Excess job-related expenses may actually trigger AMT.

You may want to review IRS Publication 529 (Miscellaneous Deductions).


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