Top 10 Work-Related Tax Write-Offs
Whether employee or business owner, most working adults are eligible to deduct at least some work-related expenses on their tax return. Been making coffee runs in your personal vehicle for the boss? Spending a lot of time doing your work out of a home office? Unemployed and putting money into resumes and business cards?
All of these activities, plus several others you may not have thought of, could earn you a tax write-off come April 15. Here's our list of the top 10 work-related tax write-offs.
1. Home office. This is a tricky one, but if you do it right, it can also be a big one. You may be eligible for the home office deduction if you use a designated area of your home as your principle place of business, provided you can show that you do the majority of your work there. If the home office is its own structure separate from the house, like a detached garage, the requirements are slightly less strict.
2. Travel expenses. Money spent traveling for business can be tax deductible provided you weren't reimbursed by your employer and often includes expenses like plane fare, taxis, hotel stays, and 50 percent of meals and entertainment. Be aware, however, that if you bring your spouse or family along, only your expenses are deductible.
3. Mileage/Auto maintenance. If you use a vehicle for work you may be able to deduct the money you spend to keep it on the road, such as maintenance and fuel. You can choose to take either actual expenses (oil changes, tires, gas, etc.) or a standard per mile deduction (around 50 cents per mile). When tallying mileage, miles driven to and from your place of business are not eligible; only miles driven during working hours for business purposes, such as going to the post office or meeting a client for lunch qualify.
4. Uniforms and costumes. Money spent on uniforms, clothing and costumes used for work is deductible as long as it's necessary for the job and isn't usable for anything else (e.g., a new suit is not deductible, but a clown costume could be).
5. Job-hunting expenses. If you're unemployed and looking for a job in the same line of work, you can deduct the cost for things such as resumes, business cards, postage, employment agency fees, and even travel expenses for out-of-town interviews. Expenses related to finding a new line of work are not eligible.
6. Moving expenses. You can deduct costs related to moving if you relocate more than 50 miles away and do so for reasons related to your current job or business, or in order to obtain your first job. The moving deduction does not apply if you move in order to get a new job.
7. Entertainment and gifts. You can deduct 50 percent of the cost of "entertaining" current or prospective clients and customers, as long as it was directly related to work -- which usually means substantial business discussions must have taken place before, during or after the event. In addition, up to $25 in business gifts given to clients, customers and business associates can be deducted per person per year, as long as you weren't otherwise compensated or reimbursed.
8. Education and licensing. Fees and expenses related to education that improves your current job skills or are required to maintain your job (e.g., continuing education credits for medical professionals) are tax deductible, but education for obtaining a new job or for simply meeting the minimum requirements of your current job (such as going to medical school) are not.
9. Supplies or equipment. Supplies or equipment necessary to do the work that are not otherwise provided or reimbursed are eligible for deduction, including devices that assist the physically or mentally impaired with job functions. Examples can include everything from tape and Post Its to a special headset for the hearing impaired.
10. Subscriptions and dues. Subscriptions paid for magazines and trade journals related to your work are deductible, as are union dues and membership fees for professional organizations that improve your job skills (and aren't strictly social).
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Rigel Celeste is a freelance writer and artist living in a small city in the middle of Midwest farming country. In her free time she enjoys gardening, hiking and playing with her dog, and drinking coffee while staring out the window.