Can I Deduct Expenses Related To My Job Or Business?

Maximizing Tax Deductions for Your Job or Business

1. Job-Related Expenses:

   - Employees may deduct some unreimbursed job-related expenses as miscellaneous itemized deductions on Schedule A (Form 1040), with limitations:

     - These expenses must be necessary for your job and common in your industry.

     - They must be incurred for the convenience of your employer and not just for your benefit.

     - Examples of deductible job-related expenses include travel, meals, lodging, home office costs, supplies, uniforms, tools, professional dues, licenses, and continuing education.

     - However, miscellaneous itemized deductions, such as unreimbursed employee business expenses, are deductible only if they exceed 2% of your adjusted gross income (AGI).

2. Business Expenses:

-Self-employed individuals and business owners can deduct ordinary and necessary business expenses on Schedule C (Form 1040) of their tax return.

-Deductible business expenses often include rent, utilities, supplies, equipment, travel, meals, advertising, insurance, and professional services, among other operating costs.

- Business expenses must be ordinary and necessary for your trade or business and incurred to generate income. 

3. Record-Keeping: 

- Keep detailed records of job-related or business expenses for tax deduction purposes, including receipts, invoices, bank statements, and other supporting documentation.

- Proper record-keeping will help you substantiate your deductions in case of an IRS audit or inquiry.

4. Tax Reform Changes:

- The Tax Cuts and Jobs Act (TCJA) altered deductions, eliminating miscellaneous itemized deductions, like unreimbursed employee business expenses, until 2025, except for specific eligible expenses for qualified employees.

- However, self-employed individuals and businesses can still deduct ordinary and necessary business expenses.