As an employee of another company or business, you may qualify to deduct any expenses you paid out of pocket. Generally, you will have to itemize your deductions using a Schedule A, Itemized Deductions in order to claim allowable expenses. Follow these five tips to maximize your deduction and avoid delays in processing your return:
- You are only able to deduct expenses that are considered ordinary and necessary. These expenses are those which are typical in your industry and appropriate or helpful to the business.
- You likely will report your expenses on a Form 2106 or Form 2106-EZ to figure the total amount of allowable expenses. You then report the total on a Schedule A as a miscellaneous deduction, equal to the amount that exceeds two percent of your adjusted gross income.
- As an educator of students in kindergarten through 12th grade, you may be entitled to up to $250 in expenses as a deduction. These expenses relate to items used in the classroom, including books, supplies, and equipment. This type of deduction is taken as an adjustment to your tax return instead of as an itemized deduction.
- You should keep records and receipts to substantiate any expenses you wish to deduct.
- Some examples of unreimbursed expenses that you can deduct include:
- Uniforms and work clothes that aren’t suitable for streetwear
- Tools and other job required supplies
- Use of your personal vehicle for business purposes
- Meals and entertainment relating to business
- Business travel
- Use of your home for conducting business
- Education expenses related to business