Glendale CPA | Employee Expenses

Glendale CPA | Employee Expenses

Employees paying for work related expenses out of their own pocket may be entitled to deduct those costs on their Schedule A, Itemized Deductions. Here are a few tax tips about this deduction.

1. The expenses must be considered ordinary and necessary. You can only deduct unreimbursed expenses that are considered to be ordinary and necessary in their line of work. Ordinary expenses are those that are common and accepted in their industry. Necessary expenses is one that is appropriate and helpful to their business.
2. Some costs that you may be able to deduct are:
   1. Required work clothing or uniforms that are not appropriate for everyday use.
   2. Supplies and tools that you are required to use on the job
   3. Business mileage or actual expenses for the business use of your car
   4. Business meals and entertainment.
   5. Business travel away from home. This includes lodging, rental cars or airfare while working away from home.
   6. Business use of your home. This includes a portion of all of your household expenses based on the square footage used exclusively for business.
   7. Costs from work related education
3. In most cases, employees will use form 2106 to figure their allowable deductions. This total will then carry to form Schedule A as a miscellaneous deduction. You can then deduct the amount that is more than 2% or your adjusted gross income.
4. If you are a kindergarten through 12th grade teacher, you may be able to deduct up to $250 of certain expenses you paid for. The may include books, supplies or equipment used in your classroom. This deduction is claimed as an adjustment and not an itemized deduction. This law expired at the end of 2014, but it us expected to be renewed for 2015.
5. You must keep records to substantiate any deductions claimed.

If you have any questions or would like further information, please contact us at Dusseau & Makris, PC, your Glendale CPA firm.