Employee Business Deductions List

As an employee there are quite a few business expenses that you can deduct. You can deduct any unreimbursed expenses or the difference between your actual expenses and any amounts that you have been reimbursed for. Check the list below for possible deductions, make sure that you keep accurate records of your expenditures, and make sure the expense meets the IRS criteria.

To take these deductions, use Form 2106, Employee Business Expenses, or Schedule A Line 20. Remember these expenses are reduced by 2% of Adjusted Gross Income.

Items You Can Deduct If You Are an Employee

Books for your trade or profession
Business bad debt of an employee
Business liability insurance premiums
Damages you pay to a former employer for a breach of an employment contract
Depreciation on job-related equipment that you purchased – includes computers and cellular phones
Dry-cleaning costs for your uniforms or protective clothing. Everyday clothing is excluded
Dues to a professional society, if the organization represents people in your profession
Dues to chambers of commerce and similar organizations, if the membership helps you carry out your job duties and the organization’s main purpose is not to provide entertainment or entertainment facilities
Educational expenses related to your present job
Entertainment Expenses – 50% of Entertainment costs that are directly related to business or are associated with business
Expenses for an office in your home if part of the home is used regularly and exclusively for your work and if use of your
home office is for the convenience of your employer
Gifts, but only up to $25 per recipient
Job dismissal insurance premiums
Job search expenses (see details below)
Laboratory breakage fees
Legal fees related to your job
Licenses and regulatory fees
Malpractice insurance premiums
Meal expenses – 50% of meals that are directly related to business or are associated with business
Medical exams required by your employer
Occupational taxes if they are charged at a flat rate by your city or other local government for the privilege of working in
that area
Passport for a business trip
Protective clothing and gear
Regulatory fees for your profession
Repayment of an income aid payment received under an employer’s plan
Research expenses of a college professor
Rural mail carriers’ vehicle expenses
Safety equipment, such as hard hats, safety glasses, safety boots, and gloves
Specialized clothing designed for your job, as long as they’re not suitable for everyday wear
Subscriptions to professional journals and trade magazines related to your work
Supplies you use on your job
Teachers’ Expense Deduction – Eligible educators are entitled to an above-the-line deduction of up to $250 per year for unreimbursed expenses incurred in connection with books, supplies, computer equipment and other physical equipment, and supplementary materials used in the classroom – set to expire after 12/31/05
Tools and supplies used in your work
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
Travel costs incurred while away from home on business for your employer
Travel costs paid in connection with a temporary assignment
Uniforms (unless you’re full-time active duty in the armed forces)
Union assessments for benefit payments to unemployed union members
Union dues
Union initiation fees

Deductible Job Search Expenses

Advertising
Career counseling to assist you in improving your position
Employment agency fees
Executive recruiters’ fees
Legal and accounting fees you pay in connection with employment contract negotiations and preparation
Long-distance calls to prospective employers
Meal expenses – 50% of meals you pay for when they are directly related to your job search
Newspapers you purchase to read the employment ads
Other business publications you purchase to read the employment ads
Portfolio preparation costs
Resume preparation
Transportation costs when traveling to job interviews
Travel to get a job. If you take a trip away from home to look for a new job, your expenses for traveling, lodging, meals (50%), etc., are deductible only if the primary purpose of your trip is to look for a job.