Here at the Daily Deduction, we spend a lot of time thinking about federal taxes, but chances are high that the state tax man took a bite out of your budget this year too.
You can deduct as a miscellaneous expense on Schedule A (subject to the 2% of AGI exclusion) any expenses paid in connection with the “determination, collection or refund” of a federal, state or municipal income, estate, gift, property or other tax.
Yesterday I told you that computers and peripherals are “listed property” that require special recordkeeping and depreciation if used for business.
The IRS, in Publication 529, tells us that you can only deduct a computer as an employee if it is (a) for the convenience of your employer, and (b) required as a condition of your employment. You cannot deduct a computer if its business use is merely for your own convenience.
The items that you can deduct on Schedule A under the category of “Miscellaneous Expenses” can best be described as “ordinary and necessary” expenses incurred for the production, collection or protection of income.
You can deduct the cost of uniforms and work clothes that are required as a condition of employment and not adaptable to everyday wear. The uniforms of firefighters, nurses, police officers, security guards and the like are deductible, as well as special jackets, hats, shirts and ties with a company logo, such as those worn by fast food workers and maintenance employees.
With unemployment at record high levels, a miscellaneous tax deduction that many taxpayers can take advantage of is for job-seeking expenses.
You can deduct expenses you incur to look for a job in your present line of work. This includes:
We’ve all heard the slogan “What Happens in Vegas Stays in Vegas.” When it comes to an IRA, the same rule — What Happens in Your IRA Stays in Your IRA — applies for income tax reporting.
You can’t claim a business travel deduction for commuting — driving from home to your place of business, or your first business stop of the day, and from your place of business, or your last business stop of the day, back home.
Some employees don’t work in an office, store or other business location. A good example is commission salesmen for out-of-state companies — they work out of their homes. They may be able to claim their home office as a miscellaneous deduction on Schedule A.