Questions & Answers

Employee Expenses

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The Tax Cuts and Jobs Act changed the employee expenses deduction to only apply to certain types of employees.

Examples of employee expenses are union dues, professional dues, tools, safety shoes, safety glasses and other protective clothing, uniforms, transportation (other than commuting), business cards, licenses, trade magazines and subscriptions, meals (50% is nondeductible), briefcase, office supplies, expenses related to temporary out-of-town job assignments, business travel, certain education expenses, certain job search expenses, malpractice insurance, home office expense, books and magazines used on the job, and any other expense that relates to your job that you paid for out of pocket and your employer did not reimburse the expense.

If your employer reimburses you under an accountable plan, there is nothing to report on your tax return. Your job expenses have been reimbursed, so you can't claim those same job expenses as unreimbursed employee expenses. An accountable plan is the best way to handle employee job expenses, and most large companies have accountable plans in place to handle employee job expenses.

If your employer reimburses you under a nonaccountable plan, the reimbursement is included as wages on Box 1 of your W-2, and you will deduct your job expenses on Form 2106. For example, if your employer gives you $200 a month for job expenses and doesn't require you to submit receipts or return any unused money, then you are being reimbursed under a nonaccountable plan, and you need to report your job expenses on the Job Expenses screen because the reimbursements you received during the year will be included as wages on your W-2.

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