Do you have expenses relating to your job? If so, you may be able to deduct them on your Form 104, Schedule A, Itemized Deductions, when you file your taxes. These deductions are taken as a miscellaneous itemized deduction, and are subject to adjusted gross income limitations.
Traveling expenses are generally non-deductible, however some transportation costs may be able to be claimed as a deduction if related to work. Local transportation expenses that are typically deductible are those that originate from the home location of work to another job site. If your office is your primary place of business, you can deduct travel expenses incurred when you travel from your home office to another business location. If you travel outside the community where you normally work, travel expenses between the resident and the short-term employment location are possibly deductible. If you frequent different work locations, your travel costs may also be deductible.
If you accrue expenses due to business entertainment or gifts from the company, the deduction may be limited. You should always keep an accurate record of the expenses to serve as proof of the deduction, for example receipts for purchases, etc.
Some employers offer reimbursement for different employee expenses. In these circumstances, the amount shouldn’t be added to your income on your Form W-2, and therefore can’t be deducted.
Your employer may reimburse you from an accountable plan. In order to be considered accountable, the plan must conform to all of the following:
- You paid or accrued expenses while working, providing services for the business, or promoting company products
- You reported your expenses within a reasonable amount of time
- You return any reimbursement amounts that exceeded your expenses.
If these conditions are not met, the employer reimbursement must be added to your income on your Form W-2.
Transportation costs reimbursed through an accountable plan will be reported as income if the reimbursement amount exceeds the federal rate. Box 12 will list the amount of your allowable reimbursement. If your expenses are greater than your allotment, you can itemize your deductions in order to claim the full amount.
You can file Form 2106 or 2106-EZ to claim business employee expenses. The expenses are deducted as a miscellaneous itemized deduction, which is subject to a 2% of your adjusted gross income limitation.