If you use your car for business purposes you can deduct either the standard mileage rate (53.5¢ per mile in 2017) or actual car expenses for the year. Similarly, tolls and gas are not deductible for regular transportation to work, but are deductible for work-related trips. The cost of parking at your permanent place of work is not deductible, but parking to attend a business meeting is. You cannot, however, deduct typical commuting costs within your metropolitan area.įor commuters, the costs of traveling to and from work, whether by train, car, cab or bus, are considered personal expenses-even if you do work on the trip. If you have no permanent office and work regularly within your metropolitan area, you can deduct the cost of travel outside that metropolitan area.
If you work in two places in one day, whether or not for the same employer, you can deduct the cost of going between them. Auto and travel expensesīusiness travel expenses are some of the most frequent work-related deductions.ĭeductible auto costs include expenses for traveling between one workplace and another (not including a home office), visiting clients, going to a business meeting away from your regular workplace or getting to a temporary workplace. As with all deductions, it’s important to keep detailed records and/or receipts. Here are some of the more common workplace deductions.
And, of course, the costs can’t be reimbursed by your employer. All expenses must be incurred during the tax year, must be trade- or business-related, and must be “ordinary and necessary.” The expenses don’t have to be required, however: In IRS-speak, a necessary expense is simply one that is helpful and appropriate for your business. Once you are sure you qualify to deduct work-related expenses as an employee, you’ll have to be sure your deductions qualify. You must also meet what’s called "the 2% floor." That is, the total of the expenses you deduct must be greater than 2% of your adjusted gross income, and you can deduct only the expenses over that amount. To deduct workplace expenses, your total itemized deductions must exceed the standard deduction. If you’re a salaried employee, you may be surprised to learn that your deductions include certain job-related expenses. Paying taxes is inevitable-but finding extra tax deductions is enviable. Taxpayers classified as employees can also deduct some of their unreimbursed business expenses.īeginning in 2018, unreimbursed employee expenses are no longer eligible for a tax deduction on your federal tax return however, some states such as California continue to provide a deduction on your state tax return if you qualify. Deducting business expenses isn't just for the self-employed.
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