give a little extra in their jobs.
If that giving is literal
-- you paid some work-related costs and weren't reimbursed
-- you may be able to turn your professional dedication
into a tax break.
Many unreimbursed employee expenses
can be counted as miscellaneous
deductions if you itemize on Schedule A.
The only problem is
that these deductions don't do you any good until they
come to more than 2 percent of your adjusted gross income.
That means a worker with an AGI of $30,000 must have
expenses of more than $600 before the expenses are deductible.
And even then, only
the amount over $600 counts.
expenses to consider
While the percentage requirement
may seem out of reach, there are many costs that workers
overlook when totaling their business expenditures.
Among the employee-paid expenses the Internal Revenue
Service allows you to consider toward the 2 percent
- Depreciation on a computer or
cellular telephone required to do your job
- Dues to chambers of commerce,
professional societies and unions
- Education that is employment-related
office or part of your home used regularly and
exclusively in your work
expenses in your present occupation
- Legal fees related to doing
or keeping your job
- Licenses and regulatory fees,
as well as occupational taxes
- 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
- Travel, transportation, entertainment
and gift expenses related to your work
- Work clothes and uniforms and
their upkeep costs
IRS work-related guidelines
course, the IRS has some ground rules when it comes
to determining precisely whether these unreimbursed
costs can be counted.
Your expenses must have been required
for you to carry out the job for which you were hired
and must be what the IRS calls "ordinary and necessary."
This means the item or service is common and accepted
in your line of work and is appropriate and helpful
to your job.
And while you'll get no argument
that making it to your office is an ordinary and necessary
activity all employees face, you can't write off the
cost of getting there. For most of us working stiffs,
unreimbursed commuting expenses, either by car or mass
transit, generally aren't tax deductible -- not even
if you're conducting business via your hands-free cell
phone in transit.
The IRS also puts additional limits
on items within allowable expense categories. For example,
although professional memberships generally are allowed,
the IRS will reject dues you pay to a group whose main
purpose is to provide entertainment activities for members
and their guests. Similarly, dues to airline, hotel
and luncheon clubs are not deductible.
Work clothing also has certain standards
to meet before the IRS will allow it as a deduction.
And there are additional limits on travel, meal and
The total of your unreimbursed employee
expenses is entered on line 20 of Schedule
A. Usually, you'll need to detail your expenses
on either Form
2106, Employee Business Expenses,
2106-EZ, Unreimbursed Employee Business Expenses.
To count the depreciated costs of any equipment used
in your job, you'll also need Form
4562, Depreciation and Amortization. And as always,
when it comes to tax deductions, good record keeping
is a must.
But don't let these additional forms
or the time-consuming task of receipt gathering scare
you off. The extra effort could be worth it if your
unreimbursed employee expenses help you cut your total
Kay Bell writes Bankrate's tax stories from her home
Texas, and blogs on tax topics at Don't
Mess with Taxes.
Updated: March 21, 2007