Tax season is upon us. The deadline is fast approaching and everyone is scrambling to send them off in time. STOP! Before you rush into your local tax office, start compiling your paperwork for deductions. Yes, deductions…yes, even you. Job commitments such as formal work events or office supplies quite possibly can be written-off. Here’s a list of a few expenses that you may be able to deduct:
1. Meals and Entertainment. There is a lot that comes along with business. Schmoozing clients could be a big part. Did you take a client to dinner? Have to attend a $100 networking event? If you were never reimbursed by your company for these events, you can claim the attire, the ticket cost, the meal, and the show on your taxes.
2. Transportation and Travel. Note that the per-mile reimbursement rate varies depending on activity. Review the standard mileage rates list here: http://www.irs.gov/Tax-Professionals/Standard-Mileage-Rates
3. Technology. If you were forced to buy a laptop, Ipad, or cell phone for work purposes, absolutely expense this.
4. Work-related licenses or union dues. These can be written off as well as medical examinations if required by your company.
5. Tools, work supplies, and uniforms (if not reimbursed already)
6. Job Search Expenses. This may sound crazy but if you paid an employment agency any fees, paid for printing/mailing resumes, or even had travel expenses getting to interviews, these can all potentially be written off. Even if you didn’t land a job!
7. Educational Expenses. You may be able to write-off educational expenses for you, your spouse, or even a dependant! Additionally, there are 2 educational tax credits that you can use to your advantage: the American Opportunity Tax Credit and the Lifetime Learning Credit. Don’t know about them. Read the details here: http://www.irs.gov/publications/p17/ch35.html
Now this can all be done, it just takes a bit of work. There are also a few things you need to know in order for you to successfully write-off these expenses:
1. Itemize all of your deductions
2. You are allowed to only deduct a portion of your work-related expenses, meaning that it cannot exceed 2% of adjusted gross income. (Let’s be realistic here people.)
3. Know that if your 1040 form states that you have to pay the AMT (alternative minimum tax) then you cannot write-off your work-related expenses.
Don’t go crazy with deductions, they can increase your risk of being audited. However, if you keep complete records and can verify everything you claimed, then you are golden. Be truthful and honest, and put your hard-earned money back in your pocket.