What kind of employee business expenses can I deduct?

You may deduct most "ordinary and necessary" out-of-pocket expenses incurred in connection with your employment. These include, but are not limited to:

Professional or union dues (Does NOT include dues to social, athletic, meal or entertainment clubs, regardless of the percentage of business use.)
Publications and subscriptions
Uniforms and cleaning (Note: These must be UNSUITABLE to wear for personal purposes. For example, a new suit you wear at the office is not deductible, because you *could* appropriately use it for personal purposes. Whether or not you do isn't the factor.)
Small tools and work supplies (Major purchases must be capitalized and depreciated - See Form 4562)
Business telephone - You can deduct only separately-incurred business expenses for additional lines or services, long distance calls, etc. You cannot deduct any portion of the basic charge of the first residential telephone line in your home, regardless of the percentage of business use.
- Note: Cellular telephones are in a category of assets called "Listed Property." If you are claiming a deduction for the cost or usage of a cellular phone, you must keep a written log of the minute usage, and only deduct the business percentage.
Malpractice insurance
Professional license renewals
Business gifts (but no more than $25 per person each year
Any other expenses unique to your employment. For example, if you are required to reimburse your employer for cost of breakage, cash shortages.

These expenses are deducted on Schedule A as an Employee Expense, subject to the 2% of AGI limitation.

Exceptions: Certain "performance artists" may be allowed to deduct their expenses on the front of Form 1040; see Form 2106 instructions for details. Also, the work-related expenses incurred specifically due to a physical or mental disability can be deducted without regard to the 2% limit.

[Back] [Home] [Up] [Next]

Disclaimer
We do not offer legal advice. All information provided on this website is for informational purposes only and is not a substitute for proper legal advice. If you have legal questions, we recommend that you seek the advice of legal professionals.

Tax Disclaimer: To ensure compliance with IRS Rules, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein.