Working to maintain your own home and personal life can be strenuous if your expenses exceed your income. Fortunately for you, the very work you do may make you eligible for tax credits with the Internal Revenue Service. If you itemize your deductions, you can write off a wide variety of work expenses as long as they're necessary for your job.
Most "Nestles" take the standard deduction, which is a fixed amount that cuts your adjusted gross income (AGI). The IRS uses your AGI to establish how much tax you owe at the end of the tax year. Itemizing deductions can lessen your AGI even more, and cut back on your tax bill. Expenses you can include in your itemization are medical and dental bills, donations to charity, mortgage and investment interest, casualty or loss, and most work expenses. If your employer reimburses you for these expenses, forget about making this claim; it must be something you pay for out of your own pocket. To itemize your deductions, you must use Form 1040 and Schedule A to file your taxes.
Work Expense Qualifications
It's tempting to think of everything you need to do your job as a potential deductible expense, but the IRS does not agree. The only eligible expenses are those that occur during the tax year and are not reimbursed by your employer. The IRS is also firm about the expense being "ordinary and necessary" for your job. That means you'll need to prove anything you claim is accepted and common in your business, profession or field of trade. One more thing: keep the receipts for anything you claim as a deduction. You'll need them in case the IRS comes calling with an audit.
You're in luck tax-wise if your employers requires you to use your own vehicle to perform your job. You can deduct your mileage using the actual cost or the standard mileage rate, which is 55.5 cents per mile as of 2012. Safety equipment, tools, protective clothing, uniforms, physical examinations, subscriptions to professional journals, and fees to employment agencies are also allowed as deductions. For more information on work expenses and limitations, read the "Job Expenses and Certain Miscellaneous Deductions" section of the Schedule A instructions.
Some expenses, such as traveling to and from work and what you pay for lunch, are not deductible on your income taxes. Although you'll acquire these costs during any normal workday, the IRS believes these expenses are a necessity of life. The IRS also prohibits you from claiming personal disability premiums and the cost to attend stockholder's meetings --unless you own stock in the company or your presence is required.
The IRS understands that teachers are underpaid and unappreciated. If you're an educator, you can claim a special credit, which reimburses you for some of your out-of-pocket costs to supply a classroom. To claim this credit, you must work as a teacher, counselor, assistant or principal at a school serving any grades between kindergarten and high school. You also need to work at least 900 hours during the school year. The IRS only allows you to write off purchases for classroom materials, such as crayons, books and pencils. Unlike unreimbursed work expenses, educator expenses do not apply the 2 percent AGI rule, and the maximum credit allowed is $250 per year. Form 1040 and Form 1040A contain lines to claim the credit. That means you don't have to itemize to get it.
Angela M. Wheeland specializes in topics related to taxation, technology, gaming and criminal law. She has contributed to several websites and serves as the lead content editor for a construction-related website. Wheeland holds an Associate of Arts in accounting and criminal justice. She has owned and operated her own income tax-preparation business since 2006.