Certain employee expenses are deductible as miscellaneous itemized deductions on Form 1040, Schedule A. Miscellaneous itemized deductions are subject to a 2% limit, which means you can deduct the amount of deductions left after you subtract 2% of your adjusted gross income from the total amount of deductions. Miscellaneous itemized deductions include the deductions for the following expenses:
- Dues paid to professional societies.
- Employment related educational expenses.
- Expenses of looking for a new job.
- Professional books and magazines.
- Union dues and fees.
- Business related travel, transportation, meal and entertainment expenses sometimes claimed on Form 2106 or Form 2106-EZ.
- Work clothes and uniforms.
- Certain legal fees to collect taxable income, such as alimony.
- Fees for renting a safe deposit box to store investment related material.
- Fees for having a tax return prepared.
If you purchased a computer or a cellular phone, you can claim a depreciation deduction if you use it in your work as an employee, and its use is for the convenience of your employer and required as a condition of your employment. Depreciation is figured on Form 4562, Depreciation and Amortization. This deduction also will be subject to the 2% limitation.
Substantiated gambling losses are deductible in the year incurred, but the losses you deduct cannot be more than the gambling winnings you report as income. This deduction is not subject to the 2% limitation.
Some miscellaneous expenses that you cannot deduct are:
- Commuting expenses going to and from work,
- Fines and penalties you pay for violating a law,
- Burial or funeral expenses; and
- Losses from the sale of your home or personal car.
If you want more in depth information about educational expenses, refer to IRS Topic 513. For further information on employee business expenses, refer to IRS Topic 511 and IRS Topic 512.
For additional information, refer to IRS Publication 529, Miscellaneous Deductions, or IRS Publication 946, How To Depreciate Property.