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).
TTFN
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