Taxpayers who pay work-related expenses out of their own pocket may be able to deduct them. Generally, employee business expenses are deductible if they are more than two percent of adjusted gross income. In most cases, they go on IRS Schedule A, Itemized Deductions.

1. Know these Helpful
Tips about Employee
Business Expenses
Taxpayers who pay work-related expenses
out of their own pocket may be able to
deduct them. Generally, employee
business expenses are deductible if they
are more than two percent of adjusted
gross income. In most cases, they go on
IRS Schedule A, Itemized Deductions.
Other key points about employee business
expenses:

2. They must be Ordinary and
Necessary
People can only deduct
unreimbursed expenses that
are ordinary and necessary to
their work as an employee.
An ordinary expense is one
that is common and accepted
in the industry. A necessary
expense is appropriate and
helpful to a business.

3. Expense
Examples.
Some
potentially
deductible
costs
include:
• Required work clothes or
uniforms 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 a home.
• Work-related education.
This list is not all-inclusive.
Special rules apply for
reimbursed expenses by an
employer. IRS Publication
529, Miscellaneous
Deductions, and Publication
463, Travel, Entertainment,
Gift and Car Expenses,
provide more details.

4. Forms to Use.
In most cases,
expenses are
reported using Form
2106 or Form 2106-
EZ.
IRS Schedule
A may also be used
Keep Records
The IRS urges people
to keep good records for
proof of income and
expenses and also as a
reminder not to overlook
anything.
IRS Publication 17, Your
Federal Income Tax, has
more on what to keep
ll taxpayers should keep a copy of their tax
return. Beginning in 2017, taxpayers using
a software product for the first time may
need their Adjusted Gross Income (AGI)
amount from their prior-year tax return to
verify their identity. Taxpayers can learn
more about how to verify their identity and
electronically sign tax returns at Validating
Your Electronically Filed Tax Return.

5. Educator Expenses.
K-12 teachers may be able to deduct up
to $250 of certain expenses paid in
2016. These may include books,
supplies, equipment and other materials
used in the classroom. They are an
adjustment to income rather than an
itemized deduction. In other words,
people do not need to itemize to claim
them. IRS Publication 529 has more.

6. IRS YouTube
Video:
Most people qualify to use free,
brand-name software to prepare
and efile their federal tax returns
with IRS Free File. Free File
software helps to determine what
expenses may be deductible.
IRS
Free
File.
Welcome to Free File –
English

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