Employee Business Expense Tax Tips

As an employee of another company or , you may qualify to deduct any expenses you paid out of pocket. Generally, you will have to itemize your deductions using a , Itemized Deductions in order to claim allowable expenses. Follow these five 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 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, , 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 that you can deduct include:
  • and work clothes that aren’t suitable for streetwear
  • Tools and other job required supplies
  • Use of your personal vehicle for business purposes
  • and entertainment relating to business
  • Use of your home for conducting business
  • Education expenses related to business