Internal Revenue Code allows workers and employees certain deductions that are nencessry for carrying out jobs assigned to them .In other words , certain types of job-related expenses that are not reimbursed by the employer but incurred by an employee for the purpose of job might qualify for deductions from taxable income under certain conditions .
4 Requirements for Claim of Job Related Expense
- Expenses must be neceesary and common for carrying out the job for which you were hired.
- You must itemize on Schedule A,
- Your total itemized deductions must exceed the standard deduction
- Your unreimbursed business expenses must total more than 2 percent of your adjusted gross income (AGI). So , if your Adjusted Gross Income is $1,00,000 , then the expense must be at least $2,000.
10 expenses qualify for deduction?
Following types of expense that are unreimbursed by the employer may qualify for deductions
- Medical examinations that are required by your employer.
- Legal fees for keeping your job or continuing with the job
- Licenses and regulatory fees as well as occupational taxes.
- Dues to professional groups, unions, or local trade groups.
- Education that is related to or required for employment.
- Work clothes and uniforms, and possibly upkeep costs.
- Subscriptions to professional journals and magazines related to your line of work.
- Depreciation on technology required to do your job.
- A home office or part of your home used regularly and exclusively for work.
- Work-related travel expenses on taxi, plane, train or car while working away from home on an assignment that lasts one year or lessYou have a choice about how to deduct the cost of meals that are business-related, or eaten while on an unreimbursed travel excursion. You can deduct 50% of the actual meal cost, or take 50% of the per diem rate for the location of your travel
There can be any number of expense that can be allowed by IRS provided you can substantiate with the aforesaid three conditions,
Should you keep records of expense?
Yes, for two reaons . One you can track if 2% threshold is crossed or not and second that IRS may just require you to prove the claim of incurring expense . If you’ve determined that you qualify for deducting some of these expenses you can look to Form 2106 or 2106-EZ.