Taxpayers that pay business expenses out of their pocket, but don't get reimbursed by their employer, may be eligible to deduct the expenses on their tax return.
1. Ordinary and Necessary: The IRS requires that the expenses be ordinary (common and acceptable in the industry) and necessary (appropriate and helpful to a business).
2. Examples of Expenses: Below is a list of potentially deductible expenses:
- Required work clothes or uniform not appropriate for everyday use
- Supplies and tools for use on the job
- Business use of a car
- Business meals and entertainment
- Business travel away from home
- Business use of your home
- Work-related education or certificates
(The above list is not all-inclusive.)
3. Keep Good Records: The better your records, the easier it is to support your expenses in the event of an audit. Record keeping can include, but is not limited to, logs for mileage and meals, receipts, invoices, statements, etc.
To find out if you can deduct your unreimbursed employee business expenses, give us a call at (610)863-8347 for a free consultation.
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