Deducting Unreimbursed Employee Business Expenses

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As an employee, you are engaged in the business of being an employee, and unreimbursed expenses that are essential to the continuance of your employment are deductible for income tax purposes. However, your unreimbursed employee business expenses, plus certain other miscellaneous expenses, are deductible only to the extent that, in the aggregate, they exceed 2 percent of your adjusted gross income. Thus, it is essential that you identify all your potentially deductible expenses. Deductible unreimbursed employee business expenses may include such things as:

  • Business bad debts.
  • Business gifts, up to a limit of $25 for gifts made to any one individual during the year.
  • Business liability insurance premiums you pay for protection against personal liability for wrongful acts on the job.
  • Damages paid to a former employer for breach of an employment contract.
  • Depreciation on a computer or cell phone your employer requires you to use on the job.
  • Dues paid to professional organizations if membership helps you carry out the duties of your job.
  • Expenses of a home office or part of your home used regularly and exclusively for work, if that use is for the convenience of your employer.
  • Job search expenses in your present occupation.
  • Laboratory breakage fees.
  • Legal fees related to doing or keeping your job.
  • Licenses and regulatory fees you pay each year to state or local governments for your trade, business, or profession.
  • Malpractice insurance premiums.
  • Medical examinations required by an employer.
  • Occupational taxes.
  • Passport for a business trip.
  • Subscriptions to professional journals and trade magazines related to your work.
  • Tools and supplies used in your work, if they wear out and are thrown away within one year from the date of purchase.
  • Travel, transportation, meals, entertainment, and local lodging related to your work.
  • Union dues and expenses.
  • Work clothes and uniforms if required and not suitable for everyday use.
  • Work-related education.
  • Expenses incurred in suing a former employer for wrongful termination.

Please call us at your convenience so that we can discuss how to maximize your deduction for unreimbursed employee business expenses.