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Seven Types of Employee Expenses That May Be Deductible: Save Some Tax Dollars

Today, many employees use their own resources to provide certain sundries that help their employer’s business run more efficiently. Unfortunately, these expenses are not reimbursed or employees are afraid to request reimbursement. The good news is that the IRS may allow you to get some tax relief in these circumstances.

If you find that you are spending your own money on business-related functions, home work activities, or at various workplaces, you may have the right to request a refund from the business or claim a tax deduction for your unreimbursed expenses. . These are some of the most common costs that employees can deduct if they are not reimbursed.

1. Business miles: If you use your own vehicle for business purposes, keep track of your mileage, you may be able to deduct it at 51 cents per mile (2011 figure). If you travel between workplaces during the day, make bank deposits, deliver packages or supplies, or drive as a third-party salesperson, your miles can add up to big tax savings.

2. Travel expenses: If you must travel overnight for any business-related reason without being reimbursed, your costs are deductible. Conferences, continuing education trips, off-site training programs, or any other business-related travel costs are deductible. Be sure to keep your receipts and a log book.

3. Parking and tolls: If you pay tolls or even certain parking fees as part of your job, you may be able to deduct them. Daily travel tolls are do not deductible, but any other toll is. If you work in a downtown area and your employer does not provide on-site parking, your off-site parking fees may be deductible. Save your receipts and notify your tax advisor.

4. Uniforms: Uniforms are often overlooked. Whether it’s nurse uniforms or steel-toed work boots, they are a requirement of the job. While some employers provide them, many others do not. If you find that you are buying clothing items that are used exclusively at your job and would not be used for everyday wear, they are probably deductible expenses.

5. Payment by association: All fees or debts that you pay as part of your employment relationship are deductible. If you pay notary public, professional association, recertification, license, or union fees, you can also take a deduction for these items.

6. Meals and entertainment: Today, many employees are required to work overtime, to be “on call,” or to travel between work sites. If you incur food costs during these special work events, save your receipts and take your deduction. If you entertain clients or customers during or after business hours, your expenses are also deductible if not reimbursed.

7. Others: There are some other expenses that may be deductible for an average employee. Certain business gifts, office supplies for a home office (if you do some work at home), job search expenses, software training, or books may be deductible if you pay for them out of pocket. Keep a record and ask your tax advisor if you are eligible.

Summary: Employees who incur out-of-pocket expenses may be entitled to an income tax deduction for these costs. But if you don’t track your expenses or ask your tax advisor, you will lose the savings. Most tax preparers and accountants are stressed during tax season and spend very little time asking questions about these expenses unless you provide the information. Don’t lose your savings. It could be enough to pay for tax preparation fees or even to fund an IRA. Either way … you win.

To discover additional financial and income tax strategies, check out my blog or download his FREE Wealth Expansion Kit by clicking here. The first step to building wealth is knowing where you are and then charting a path that will enhance your financial strengths and correct your weaknesses.

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