Deduct Your Miscellaneous Work Expenses
You can deduct many work expenses that your employer doesn't pay for.
If you're not self-employed, there is a limit to these miscellaneous
expense deductions: They are only deductible in excess
of 2% of Adjusted Gross Income (AGI). Example: if you make $20,000 per
year, you can only deduct miscellaneous expenses in excess of $400 (if you
had $540 in miscellaneous expenses, you can only deduct $140 of that amount.)
Here are some examples of miscellaneous expenses:
- Books and subscriptions that are business-related.
- Education that improves work skills.
- Job-related meals/entertainment (50% deductible).
- Tax-related expenses: tax books and software, tax advice and preparation,
the cost of mailing your return.
- Investment-related expenses: books and magazines, software, etc.
- Career-related tools and work supplies.
- Moving expenses, if your employer reassigns you to a new location.
- The cost of looking for a new job in your current profession,
even if you don't actually find a job. You can deduct
resume costs, cost of travel to job interviews, job counseling and
50% of the cost of meals/entertainment.
- Business travel, including driving from one workplace to another
(in 2005 this was 40.5 cents per mile). It's a good idea to keep a travel log
in your car, which you can pick up in the office supplies section of most
drugstores. Unfortunately, commuting from your home to your job is not
a deductible expense.
- Telecommuting and home office expenses may be deductible,
if they are for "the convenience of the employer" according to the IRS.
Try to think of all the ways you could help your company by having a home
office, and then ask your employer to let you have one.
- A computer is tax-deductible, if you need one to complete work at home
that is assigned by an employer. You could buy a new computer, and
deduct one sixth of the cost over 6 years. These costs are deductible to the extent that
the computer is used for business and investment purposes. For example, if 20% of
your time on the computer is used for investing, and 40% of usage is career-related,
60% of the computer's cost is deductible.
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Deduct Your Miscellaneous Work Expenses 
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Time to complete:
| 15-30 minutes per year accounting |
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Money you'll spend:
| $0 |
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What you'll get:
| Varies. You can save hundreds of dollars, but it's even better to start your own business (so you can avoid the 2%-of-AGI limitation.) |
Step-by-step instructions:
Label a folder "Miscellaneous Deductions".
Over the course of the year,
place receipts for deductible miscellaneous expenses in this folder.
Each November, add them up to see if you've got a worthwhile deduction. If
you're close to the 2% limit, try to prepay next year's miscellaneous expenses, so
you can get a deduction this year.
Read this BankRate.com article on Miscellaneous itemized deductions if you want to learn
about some more ideas.
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Further Reading:
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