Employee Deductible Expenses

December 16, 2008

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Unreimbursed employees’ business expenses are miscellaneous itemized deductions and are deductible from adjusted gross income, together with other itemized deductions. Again, the expenses must be “ordinary and necessary” and “reasonable” in amount and exceed 2% of adjusted gross income. Such expenses include the following

Union and trade-organization dues and convention expenses
Work clothes, including cleaning and laundry
Small tools (if useful life is less than one year; otherwise, a depreciation deduction is available)
Subscription to trade and technical journals and newspapers
Hiring of assistants and substitutes (if not paid for by employer)

The cost of work clothes and uniforms, including laundry or cleaning, is deductible if the taxpayer’s occupation is one that specifically requires special clothing that is not adaptable to general usage. The IRS lists the following as specifically deductible

Special uniforms and/or equipment required by ballplayers, fire fighters, police officers, letter carriers, nurses, and civilian faculty members of military schools
Theatrical clothes and accessories used by professional musicians and entertainers, if used solely in the course of their trade or employment
Uniforms of air, rail, bus, and other transportation employees, if used solely in the course of employment
The cost of protective clothing, including safety shoes and helmets, work gloves, oilskins, rubber boots, etc.

Note: If you can wear the same clothes when you’re not working, they’re not deductible. Last year, a Home Depot employee tried to convince me that her clothing was deductible - not. If you do deduct it and you’re audited, it will be disallowed and you’ll pay penalties and interest.

Fees paid to employment agencies for seeking or securing a job in the same line of business are deductible, as are expenses for drafting and printing of job resumes and traveling to job interviews.

Please check with your tax preparer as your situation may be different than described.

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