As an employee, you may end up making out-of-pocket purchases to support your workplace responsibilities. When you do so, you may be able to deduct some expenses. Here is further guidance to help you manage employee business expense claims.
Is there any limit on how much you can claim? Typically, yes. You’re able to deduct employee business expenses that total more than 2% of your adjusted gross income.
Are all expenses deductible? No. The IRS has rules for the type of employee business expenses you can claim. The expenses must meet two criteria for your workplace responsibilities: be ordinary and necessary.
- Ordinary: an expense that your industry identifies as common and accepted.
- Necessary: an appropriate expense that also helps the business.
What are common expense examples? The below list represents a sample of expenses that you can typically deduct and meet the “ordinary” and “necessary” requirements:
- Any clothes or uniforms you must wear at work and not for everyday use.
- Any tools or supplies you need to do your job.
- Education that supports your role at work.
- Travel for work that takes you away from your home.
To claim your expenses, you will need to file Form 2106, Form 2106-EZ, or IRS Schedule A. You can find further information on the IRS website.
*This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax adviser.