Employee Business Expenses
Un reimbursed Employee Business Expenses.Paying more taxes is something that not many of us are fond of. If one pays close attention, there are a lot of ways by which you can reduce your tax liability. And yes, these are all legal ways which the IRS has outlined. For individuals who end up spending some money from their pockets when it comes to supporting their jobs, IRS understands their situation. Well, up to some extent at least. There are certain clauses laid out by the IRS under which you can claim for deduction for such expenses.
Any expenses that you incur as part of your job fall into the category of miscellaneous deductions. What this essentially means is that you need to itemize these expenses so that you can avail deductions. All of this simply translates to the fact that taxpayers need to keep a track of all such expenses and maintain a record for the same. You can either do it yourself or hire someone to do it on your behalf. The only reason you might consider hiring someone for this is to skip out all the hard work of doing it on your own.
Since these are itemized deductions, you will not be able to claim the same under standard deductions. Another important word that takes precedence in these deductions is Un-reimbursed. If your employer has paid you back the amount you have spent or had paid in advance for such expenses, you will not be able to claim those. The deductions also won’t be valid if your employer has set aside certain allowances for such expenses.
Another small caveat to such expenses comes into the picture if your employer had paid in advance or has allowances. In such cases, you will have to provide your employer with a detailed account of how much and where the money was spent. This not only bars you from using the expenses for deductions but also adds them as a source of income in line 12 of your W-2 Form. Thus, one needs to be very careful with un-reimbursed employee business expenses.
The following is a list of items that you can claim under this deduction.
- Supplies, equipment or tools related to your job.
- Costs related to the passport for a business trip.
- Should your employer ask for any physical examinations.
- A uniform that your employer mandates.
- Fees related to Licenses and regulatory bodies.
- Any dues related to the union or similar fees.
- Taxes pertaining to your occupation.
- Additional clothing required to support your job such as hard hats, gloves, glasses, shoes etc.
- Subscription fees for related journals.
- Any fees that you pay to employment agencies in search of a new job, with the current occupation.
- Cost of depreciation of computer or other equipment that your employer wants you to work on.
Apart from the above, you can claim deductions for certain travel-related expenses as well.
- Expenses incurred as part of either getting in or out of business destinations via different modes such as flights, trains, cars, buses etc.
- Cost of meals while on travel.
- Lodging expenses while away from home.
- Any expenses related to laundry and cleaning.
- Certain expenses related to meals and entertainment only if they are related to the business directly.
- Money spent on your vehicle for business purposes.
- Any expenses related to parking, toll, and other similar expenses.
These deductions are subject to a limit of 2% of the Adjusted Gross Income or AGI of a taxpayer. If your unreimbursed deductions do not sum up to 2% of your AGI, you are not eligible for such deductions. omega automatic