Don't miss out on deductions you are allowed to take

Unreimbursed employee business expenses are allowed as a miscellaneous itemized deduction provided they exceed two percent of your adjusted gross income when combined with all your other miscellaneous expenses.

 This fact causes most taxpayers to miss out on the deduction. However, if you keep careful records of all your expenses, you may well meet the two-percent floor. In addition to these requirements, the expenses must be ordinary and necessary business expenses. An expense is ordinary if it is common and accepted in your type of business. An expense is necessary if it is appropriate and helpful to your business.

The most common types of deductible employee business expenses are professional dues, safety equipment required by your employer, and business travel. You may also take deductions for the cost of uniforms and other special work clothes that are not suitable for everyday wear, including the cost of cleaning the clothing. Some other commonly overlooked employee business expenses include:

  • Depreciation on a computer required by your employer.
  • Job search expenses for a new job in your present occupation.
  • Licenses and regulatory fees.
  • Passport for a business trip.
  • Subscriptions to professional journals and trade magazines related to your work.
  • Tools and supplies used in your work.
  • Damages paid to a former employer for breach of an employment contract.
  • Business liability insurance premiums.
  • Home office required by your employer and used regularly and exclusively.
  • Dues to a chamber of commerce if membership helps you do your job.
  • Education that maintains or improves your job skills or required by your employer.
  • Transportation costs for going between job locations in the same work day.

Tax Tips Small Business

  • Bartering and trading? Each transaction is taxable to both parties

    Sometimes, when the right opportunity presents itself, you may be able to pay for goods and services that you need or want by trading goods that you own, or providing a service that you can perform in return. An example of this is if you own a lawn maintenance company and receive legal services from an attorney and pay for those services by providing an agreed upon amount of mowing and maintenance services at the attorney's home or place of business.

    Read more ...

Small Business Quick Tip

  • Personal Assets to a Business

    If you have contributed personal assets, such as a computer or vehicle to your business, the lower of the fair market value or your cost basis of these assets qualifies as a business deduction, subject to depreciation limitations, beginning with the date of conversion.
Monday, 17th June 2019
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Tax Tips Personal

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    New rules tighten your options
     
     For the 2014 tax year, children, under the age of 18 who have unearned income in excess of $2,000,are taxed at their parent'shigher rate. At age 18. the kiddie tax applies unless the child provides more than 50% of his/her own support. The kiddie tax also applies to full-time studnets between the ages of 19 and 23 unless they provide more than 50% of their own support. Generally, unearned income includes interest and dividend income, capital gains, taxable social security benefits, and pension distributions.

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