Friday, November 12, 2010

Tax Deduction of the Week: Unreimbursed Employee Expenses

Last week the RDTC Tax Help Blog published the newest entry in their “deduction of the week” series. If you have to make unreimbursed purchases for your job, you may qualify to deduct those expenses on your next tax return! I’ve included a section of the article below, but you can read the full text here.

IRS Regulations

According to IRS Publication 29 you can deduct only unreimbursed employee expenses that are 1) paid or incurred during your tax year,

2) for carrying on your trade or business of being an employee, and

3) ordinary and necessary.

Allowable Expenses

Listed below are several examples of expenses the IRS will allow you to deduct. For a full list, be sure to read IRS Publication 29.

  • Dues to a chamber of commerce if membership helps you do your job or carry on your business
  • Job search expenses in your present occupation
  • Licenses and regulatory fees
  • Malpractice insurance premiums
  • Medical examinations required by an employer
  • Passport for a business trip
  • Subscriptions to professional journals and trade magazines related to your work
  • Tools and supplies used in your work
  • Travel, transportation, meals, entertainment, gifts, and local lodging related to your work
  • Union dues and expenses
  • Work clothes and uniforms if required and not suitable for everyday use
  • Work-related education, such as training courses

Miscellaneous Deduction

Unreimbursed employee expenses are considered part of the miscellaneous deduction on your tax return. You can include them on Schedule A, line 21 of your IRS Form 1040.