What Employee Tax Deductions Can I Claim?
Some employee expenses may be tax deductible. There are special cases for many types of employees, including educators, armed forces reservists, impaired workers, performing artists, etc.
Employee expense tax deductions include the following items:
Impairment-Related Work Expenses
If you are physically or mentally disabled and are limited in your ability to perform your job (such as performing manual tasks, walking, speaking, breathing, learning, and working) you can deduct any impairment-related work expenses. Impairment-related work expenses are ordinary and necessary business expenses for attendant care services at your place of work and other expenses in connection with your place of work that are necessary for you to be able to work.
Where to report. If you are an employee, any impairment-related work expenses can be reported on Form 2106 efile it or 2106-EZ efile it . You will need to file Form 1040 or 1040NR and also Schedule A.
Losses from Other Activities - Schedule K-1 (Form 1065-B), Box 2
If the amount reported in Schedule K-1 (Form 1065-B), box 2, is a loss, report it on Schedule A (Form 1040), line 27, or Schedule A (Form 1040NR), line 16 (only if effectively connected with a U.S. trade or business). It is not subject to the passive activity limitations.
Repayments Under Claim of Right
If you had to repay more than $3,000 that you included in your income in an earlier year, because at the time you thought you had an unrestricted right to it, you may be able to deduct the amount you repaid, or take a credit against your tax. More information about Repayments
Un-recovered Investments in Annuity
A retiree who contributed to an investment in an annuity can exclude from income a part of each payment received as a tax-free return of the retiree's investment. If the retiree dies before the entire investment is recovered tax-free, any un-recovered investment can be deducted on the retiree's final income tax return. More information about Pension and Annuity Income.
If you qualify as a performing artist, you can deduct your employee business expenses as an adjustment to income rather than as a miscellaneous itemized deduction. To qualify, you must meet all three of the following requirements:
- You perform performing arts services for at least two employers during your tax year. (You are considered to have performed services in the performing arts for an employer only if that employer paid you $200 or more.)
- Your allowable business expenses related to the performing arts exceed 10% of your gross income from the performing arts.
- Your adjusted gross income is equal to or less than $16,000 before deducting these business expenses.
If you do not meet all of the above requirements, you must deduct your expenses as a miscellaneous itemized deduction subject to the 2% limit.
Special rules for married persons. If you are married, you must file a joint return unless you lived apart from your spouse at all times during the tax year. If you file a joint return, you must figure requirements (1) and (2) above separately for both you and your spouse. However, requirement (3) applies to your and your spouse's combined adjusted gross income.
Where to report. Use Form 2106 efile it or Form 2106-EZ efile it , and you must file Form 1040 efile it or Form 1040NR. The efile.com online software will generate the proper forms for you.
Officials Paid on a Fee Basis
If you are paid on a fee basis for your services, you can claim expenses in performing services in that job as an adjustment to income rather than as a miscellaneous itemized deduction. In order to qualify under this structure, you must be employed by a state or local government and be paid in whole or in part on a fee basis.
Where to report. If you qualify as a fee-basis official, complete Form 2106 or Form 2106-EZ. You will need to file Form 1040.
Armed Forces Reservists Traveling More than 100 Miles from Home
If you are a member of a reserve unit of the Armed Forces of the United States, and travel more than 100 miles away from home to perform your services as a member of the reserves, you can deduct your travel expenses as an adjustment to gross income rather than as a miscellaneous itemized deduction.
The amount of expenses you can deduct as an adjustment to gross income is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. More information about Armed Forces Reservists.
Member of a reserve component. In order to qualify as a member of a reserve unit of the Armed Forces of the United States, you must be in the Army, Naval, Marine Corps, Air Force, or Coast Guard Reserve, the Army National Guard of the United States, the Air National Guard of the United States, or the Reserve Corps of the Public Health Service.
Where to report. If, as part of your duty as a reservist, you must travel more than 100 miles from home, you should complete Form 2106 or Form 2106-EZ. You must file Form 1040 efile it .
You may not deduct expenses for travel that does not exceed 100 miles from home, as an adjustment to gross income. In this case, you must complete Form 2106 efile it or 2106-EZ efile it and deduct the expenses as an itemized deduction on Schedule A (Form 1040).
Educator Expense Deduction
Important: The Educator Expense Deduction expired on December 31, 2013. However, Congress extended this deduction until December 31, 2014. Therefore, you can claim it on your 2014 Tax Return.
For 2014 and later Tax Returns, qualified educators may be able to claim their expenses as miscellaneous, itemized deductions (above the $250 limit, but subject to 2% rule).
Teachers and other educators (classroom aides, counselors, principals, etc.) can deduct as much as $250 for money spent on qualified educator expenses.
Learn more about the Educator Expense Deduction.
Where to report. You do not need to itemize deductions in order to take advantage of the Educator Expense Deduction. It can be claimed as an above-the-line deduction on Form 1040A or Form 1040 (Learn which 1040 form to file).
Find more work and job related deductions and deductible expenses.
See what other tax deductions you may qualify for.
How Do I Claim Tax Deductions?
You can get any of these tax deductions when you prepare your tax return on efile.com. Based on your answers to a series of simple questions, the online tax software will determine what deductions you can claim. Then the software will help you select and fill out the proper forms to get your maximum deduction amount!