In some situations, employees are able to deduct their work-related expenses as itemized deductions.
There are limitations on employee business expense deductions, and you will need to follow all requirements.
What Qualifies?
Some of those that you may be able to claim include the following:
- Transportation expenses that are incurred from going from one workplace to another workplace may qualify. However, commuting costs do not qualify.
- The cost of traveling from home offices to work places for employment may qualify (if your home serves as your primary place of business.)
- Business entertainment expenses and business gift expenses may apply. However, there are specific limits.
If your employer reimburses you for these expenses, or provides an allowance for them, the amount should not be shown on your Form W2 as pay. These reimbursements fall under an accountable plan, which means you must have incurred or paid the expense while operating as an employee and have accounted to your employer for the expenses within a reasonable time frame, and you return any excessive reimbursements. You may not deduct any of these employer-paid expenses on your tax return.
In order for any transportation costs to apply as an employee tax expense, you must meet all requirements under the Federal rate, in terms of per diem or mileage rates. You can learn more about this on Publication 1542 and Publication 463. However, it is best to discuss with a trusted tax professional.
