Tax write offs for employees

Work-related expenses are required for practically everyone, fortunately the IRS is willing to reimburse most of them. The mileage for your commute, work clothes, business travel, educational expenses, and other work expenses may qualify as tax write offs. The majority of employers are not required to reimburse their employees for work-related expenses such as uniforms and mileage reimbursement. Employees that have not been reimbursed by their employers are eligible to receive tax deductions for work-related purchases.

In order to claim work-related expenses, the employee claims must exceed 2 percent of their adjusted gross income. Employees must have proof of all purchases and prove that they were directly related to their job. Many employees fail to qualify for the tax write offs because they do not keep proper documentation of their business-related expenses. If you have struggled with this in the past, try creating a filing system to hold all of your business-related expenses. If you use a bank card or credit card for your business-related expenses, print out the statement at the end of each month and circle the appropriate items on the statement.

The proper tax form for business-related expenses is a Schedule A. This form can be downloaded from the IRS web site, along with instructions on how to properly fill out the tax form. The Schedule A will determine if you are eligible for employment-related purchases. Here are some common business-related tax write offs:

Mileage Reimbursement
The typical tax write off most employees qualify for is mileage reimbursement. Several employers will reimburse their employees for any miles driven that are work related. Miles driven to and from work are not eligible for tax deductions however they are if you have to drive to a different location than your daily work location. For example, if you drive to the same building each day, but for one week you are required to drive to a different location for training sessions or other meetings, this amount is tax deductible. As of the 2008 tax laws, the standard mileage rate for business use is 48.5 cents per mile. Any miles driven for work-related purposes in your personal vehicle can be deducted. In order to input the correct mileage driven, keep a written tally of your work miles or gas receipts.

Office Expenses
If you work from your home on a full-time or part-time basis, you can write off a portion of your rent or mortgage. In order to qualify for this tax write off, you must measure the work space you use and deduct that amount from your mortgage or rent payment. The work space must only be used for business-related purposes. This means that if you have a spare room in the house where you conduct most of your work, this room can only be used for business purposes. A spare bookshelf or closet cannot be filled with personal items. If any space is used for personal items, it must not be included in the total amount you write off on your taxes. The only way to write off a home office is if the employer allows you to work from home because they cannot provide an office space for you. If you work from home out of convenience, you do not qualify for this tax credit.

Any office supplies purchased for business use can also be written off. These items may include computers, printers, fax machines, telephone lines, internet services, paper, pens, notepads, etc. The only way these items can qualify as business-related expenses is if they are only used for business. For example, if you use your home computer for work, and also use it for personal use, it cannot be written off as a business expense. A good way to keep track of your business-related items is to keep a ledger that includes all the hours you work from home. By keeping a ledger of the time you spend on the computer, you can calculate the amount of energy you use in the home and deduct this amount from your taxes. The common utility payments that can be deducted include electrical, gas, garbage, and sewage bills.

Many people take advantage of the home office tax write offs, so keep in mind that these expenses are at higher risk for audits by the IRS. Always keep records of all home office purchases and do not estimate spending amounts on your taxes.

Uniforms/Work Clothing
Many employers require certain clothing to be worn while at work. Police officers have to purchase uniforms and have them dry cleaned often. While most employers will reimburse their employees for uniform and cleaning expenses, it is not mandatory. The only way to write off work clothing is if the employer requires you to purchase a uniform or purchase something specific, like black pants. Staples is a good example of a company that requires mandatory black pants to be worn by their employees. Any clothing item that must be purchased in order to fulfill your employer's requirements is eligible for a tax write off.

Job Search
A lot of people do not know that money spent to find a job is eligible for a tax write off. Any expenses you encounter when searching for a job can be written off, this includes fees to prepare and post your resume. Other common job search expenses include the cost to fax or mail the resume, the cost to contact the potential employers via telephone, the travel expenses you may encounter when traveling to and from interviews. If you have to fly to another city for a job interview, you may deduct your airfare, hotel, and meal expenses. If you pay for a rental car, taxicab, parking fees, or other travel expenses, they may all be deducted as job search expenses.

Phone Expenses
Several employers contact their employees after business hours via cell phone or telephone. If you are required to use your cell phone for work, and you are not reimbursed by your employer, you can write this amount off. In order to qualify for this tax write off, you must own a separate phone for business. Personal calls cannot be made on this cell phone or home phone line. A personal cell phone cannot be written off, even if you occasionally use it for work.

Educational and Training Expenses
Many employers require employees to attend yearly, quarterly, monthly, or weekly training courses. Other employers will require bachelor's degrees or another form of higher education. The amount that is eligible for a tax write off will be subject to the 2 percent of your adjusted gross income, along with other business-related expenses. If your employer does reimburse you for your tuition and other education expenses, you cannot use this as a tax write off. According to the IRS, items that qualify as educational tax write offs include the following:

• Tuition expenses
• Books
• Supplies including paper, pens, pencils, etc.
• Laboratory fees
• Research expenses
• Transportation and other travel expenses to attend the training also qualify.

Some employers will include graduate school tuition reimbursements on their employee's W-2's as wages. If your employer does this, you will need to fill out a Form 1040, Schedule A and claim the tuition expenses as a miscellaneous expense.

In order to understand which form you need to fill out, you must check the IRS web site. Self-employed individuals will need to fill out different tax forms in order to claim educational expenses. Student loans also qualify as a tax write off, the maximum amount you can claim each year is $2,500 per tax return. Typically the college or University will mail you a Form 1098-E with instructions on where to enter the interest amount on your tax form.

Travel and Entertainment Expenses
Client-related entertainment expenses qualify as a tax write off if they are not reimbursed to you by your employer. You can only claim up to 50% of the entertainment cost, and it must be considered necessary or ordinary for your profession.

While most employers reimburse their employees for business trips, there are a few that do not. Any business trips you take, that are not reimbursed by your employer are eligible tax deductions. Other expenses incurred while you are on the business trip are also eligible for deduction. These expenses may include: air fare, lodging expenses, taxicab services, dry-cleaning, meals, etc. You can only claim up to 50% of your meal expenses while on a business trip. If you attend training courses or you attend a conference, the course or conference fees are eligible for a tax write off. These fees actually qualify as an educational expense.

Another tax write off you can claim is your union or professional dues. Most employers will reimburse these dues, however employers are not required to reimburse these dues. All working taxpayers are eligible to receive a full or partial refund for business-related expenses. Since tax laws are constantly being updated, it is important to check the IRS web site for the current tax forms and instructions. If you have any questions, consult a professional tax accountant.