Many clients are curious as to what items are deductible and which are not, so I am providing the following lists of possible deductions. The lists, while not all-inclusive and not always applicable are meant to steer you in the right direction. Many deductions only apply subject to certain limitations and may only apply in certain situations or are governed by other rules. Please keep careful records and save your receipts for at least 3 years in case of audit.
Includes expenses for your job for which you weren’t reimbursed, but you only get the amount in excess of 2% of your AGI (adjusted gross income), and only if you can itemize. For instance, if your AGI is $100,000, you must have at least $2000 in employee business expenses before you will begin to benefit from the deduction.
You are allowed to deduct most business expenses in full.
Career counseling to assist you in improving your position
Legal and accounting fees you pay in connection with employment contract negotiations and preparation
Transportation costs to job interviews
Long distance calls to prospective employers
Newspapers you purchase to read the employment ads
Other business publications you purchase to read the employment ads
Half of your meals you pay for that are directly related to your job search
If you take a trip away from home to look for a new job, your expenses for traveling, lodging, meals (50% of the cost), etc. are deductible only if the primary purpose of your trip is to look for a job. To substantiate the purpose of your trip, keep a daily log of your interviews, application efforts, etc.
Meals and Entertainment
Meals and Entertaining costs (only 50% of the cost is deductible). Keep a record of the date, place, amount of expenses, people present, business purpose, and business discussed. Also keep receipts for expenses in excess of $75.
Cost of long-distance business calls charged to home phone
Separate business telephone (home phone line is not deductible)
Travel and Transportation
Traveling costs incurred while away from home on business
Traveling costs paid in connection with a temporary work assignment
Transportation between your home and a temporary work location if you have no regular place of work but you ordinarily work in the metropolitan area where you live and the temporary work location is outside that area
Transportation between your home and a temporary work location if you have at least one regular workplace for this employment. It doesn’t matter how far away the temporary location is in this case.
Transportation from one job to another if you work two places in one day
If you are self-employed and your home is your principal place of business, all business travel is deductible.
Uniforms (except if you’re full-time active duty in the armed forces)
Dry cleaning costs for your uniforms or protective clothing (not for your everyday clothing, though)
Specialized clothing designed for your job, as long as it’s not suitable for everyday wear
Safety equipment, such as hard hats, safety glasses, safety boots, and gloves
Gifts, but only up to $25 per recipient
Passport for business travel
Printing and copying
Legal and professional services (tax preparation fee)
Medical exams required by your employer
Occupational taxes if they’re charged at a flat rate by your city or other local government for the privilege of working in that area
Business liability insurance premiums
Job dismissal insurance premiums
Damages you pay to a former employer for a breach of employment contract
Employee contributions to state disability funds
Interest on business loans
Self-Employed health insurance (partial)
Commissions and fees
Keogh or SEP contributions
Rental of business property
Office rent and utilities
Repairs and maintenance
Business taxes and licenses
People commonly hope to deduct some of the following expenses, but unfortunately they are not deductible.
Expenses that were reimbursed by your employer.
Apartment Rent, unless qualified to claim away from home expenses for a business trip expected to last one year or less, or if a portion is used as a home office (special rules apply to both cases). Also, may be deductible if maintained for the sole purpose of going to school if your education expenses qualify for the business deduction.
Clothing that is adaptable to everyday wear (this includes suits, evening wear, etc.).
Commuting costs (subways and rail fares, and vehicle use including tolls, gasoline, and parking). Exception if qualified as being away from home on business or as part of
Dues to country clubs, golf and athletic clubs, and airline and hotel clubs.
Home phone line
Job hunting expenses if you’re looking for your first job, or changing professions.
Dry cleaning and laundry (unless you’re on a business trip)
Legal fees and closing costs involved in purchasing a property
Fees for taking an exam to qualify you in a profession (e.g., Bar Exam, GRE, etc.)
Immigration visa expenses, such as for obtaining a Green Card or H-1B visa.
Moving expenses that were not associated with your job and were less than 50 miles.
Moving expenses if you are claiming temporary living expenses.
Meals, unless for business meetings, or while away from home on business.
Lunch on the job.
Personal expenses, such as grooming and maintenance (gym membership) unless they are directly related to your business (e.g., models, actors).
Any other personal expenses for which there is no provision for a deduction in the Tax Code.
Interest on personal loans.
Support of family members, unless they qualify as your dependents.
Cosmetic surgery to improve personal appearance
Contributions made to individuals or foreign charities.
Student loan interest if adjusted gross income is greater than $65,000 (single) or $130,000 (married).
Student loan principal.
Real estate expenses:
Mortgage prepayment penalties
Penalties of early withdrawals
Points on principal residence financing
Real estate taxes
Auto registration fees
Charitable contributions (cash and non-cash) made to qualified U.S. charities.
Ad valorem tax
Certain special assessments
Condo or coop maintenance (property tax portion)
Disability insurance tax (some states)
Income tax (state and local)
Personal property tax
Real property tax
State transfer tax
Casualty and theft Losses
Generally, you can only deduct the excess over 7.5% of Adjusted Gross Income, and then only if you can itemize on Schedule A. This means that if you make $100,000, you can only deduct the amount of medical expenses you spent over $7,500. Please also refer to IRS Publication 502: Medical Expenses.
Air conditioner necessary for relief from allergies or other respiratory problems
Birth control pills prescribed by a doctor
Braille books and magazines used by a visually-impaired person
A clarinet and lessons to treat the improper alignment of a child’s upper and lower teeth
Cosmetic surgery to improve a deformity
Dental fees and supplies
Diet, special. When prescribed by a doctor, you can deduct the extra cost of purchasing special food to alleviate a specific medical condition.
Doctor or physician expenses
Drug addiction treatment
Elastic hosiery to treat blood circulation problems
Exercise program if recommended by doctor to treat a specific condition
Extra rent/utilities for a larger apartment required in order to provide space for a nurse/attendant
Eye surgery, when it is not for cosmetic purposes only
Fertility treatment: Limited to procedures such as in vitro fertilization (including temporary storage of eggs or sperm) and surgery, including an operation to reverse prior surgery that prevented the person operated on from having children.
Household help for nursing care services only
Insurance premiums for medical care coverage
Lead-based paint removal where a child has or had lead poisoning
Legal fees paid to authorize treatment for mental illness
Lifetime care advance payments
Lodging expenses while away from home to receive medical care in a hospital or medical facility
Long-term care insurance and long term care expenses (with limitations)
Mattresses and boards bought specifically to alleviate an arthritic condition
Medical aids. This includes wheelchairs, hearing aids and batteries, eyeglasses, contact lenses, crutches, braces, and guide dogs (including costs paid for their care).
Medical conference admission costs and travel expenses for a chronically ill person or a parent of a chronically ill child to learn about new medical treatments.
Medicines and prescription drugs
Nursing home expenses if the there to obtain medical care.
Oxygen and oxygen equipment.
Reclining chair bought on a doctor’s advice by a person with a cardiac condition.
Special education tuition of mentally impaired or physically disabled person.
Smoking cessation programs.
Swimming costs, if therapeutic and prescribed by a physician.
Telephone cost, repair and equipment for a hearing-impaired person.
Television equipment to display the audio part of a TV program for hearing-impaired persons.
Transplants of an organ, but not hair transplants.
Transportation costs for obtaining medical care.
Travel expenses for parents visiting their child in a special school for children with drug problems, where the visits are part of the medical treatment.
Weight loss program, if it is recommended by a doctor to treat a specific medical condition or to cure any specific ailment or disease
Whirlpool baths prescribed by a doctor.
Wig for the mental health of a patient who lost his or her hair due to a disease.
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