Business Deductions for Employees
by Ginita Wall, CPA, CFP

Even if you don’t have your own business, you may have some expenses that are tax deductible. If you are a salaried professional, teacher or other employee, here are some deductions you shouldn’t overlook.

• Dues for professional organizations
  
  
• Personal supplies, such as pens, pencils, briefcases, calculators, executive diaries, etc.
  
  
• Fees for credit cards used exclusively for business
  
  
• Educational expenses for courses and seminars that add to your professional expertise
  
  
• Gifts to business associates, up to $25 each
  
  
• Cost of office decoration
  
  
• Fifty percent of the cost of business lunches and entertainment, including entertaining at home
  
  
• Business use of your automobile, and local transportation for business purposes
  
  
• The cost of commuting between two jobs (but not the cost of commuting from home to work or back again)
  
  
• Business use of your home phone for long-distance and toll calls
  
  
• Costs while away from home on business, including lodging, transportation, laundry and dry cleaning, tips, and 50% of meals.

These expenses are deductible as miscellaneous deductions on your tax return, which means you must itemize your deductions to claim them. In addition, only the portion that exceeds 2% of your total adjusted gross income is deductible.

Because of these limitations, you might be better off asking your employer to reimburse you for these expenses as additional employee perks, or even in lieu of a raise. The employee reimbursement won’t be taxable to you.