Deductible Expense Tips for Late Filers

The more complicated a tax return, the more likely people are to request a six-month extension. Many of our clients fall into that category, so you’re not alone. One of the issues that creates a delay is gathering deductible expenses. While we can’t look for your records for you, hopefully the information below will answer questions about deductibility and detail the records to find.

  1. Work-related expenses that you pay for yourself (don’t receive reimbursement):
  • Expenses must be ‘ordinary and necessary.’ Ordinary expenses are those that are common and accepted in your particular industry. Necessary expenses are those that are appropriate and help your business. The expense must fulfil both qualifiers.
  • Examples of deductible business expenses include, but aren’t limited to:
    • Work clothes or uniforms that are required for work, but not appropriate for everyday use (i.e. shirts with company logos)
    • Supplies and tools you use on the job
    • Business use of your car (consider getting a smart phone app to track your business and charity mileage)
    • Business meals and entertainment
    • Business travel away from home (include baggage fees charged by airlines)
    • Business use of your home
    • Work-related education
    • Up to $250 of classroom expenses for K-12 teachers

You must have records to substantiate the expenses you deduct, and they must be specific, such as receipts and not just a line item on a credit card statement.

  1. Job search costs are deductible for:
  • Transportation (for 2015, 57.5 cents/mile for your car, plus tolls), or cab/uber fare
  • Lodging and food if you paid for them to search for a job in another city
  • Costs for printing business cards, advertising, postage, Web site development
  1. State sales tax on purchases – The IRS has a sales tax deduction calculator that can easily help you determine the deduction.

Some deductions are more complicated than others, such as home offices. Remember, a Salmon Sims Thomas tax advisor is always available to answer those quick questions that come up as you prepare your information for us to complete your return.