These jobs may come with uncommon tax deductions
Taxpayers typically cannot deduct personal expenses like clothing or commuting mileage. Deducting these expenses can usually be a red flag to the IRS to audit the return. But when it comes to the tax code, not all occupations are created equal. Some taxpayers, based on their occupation, may be able to deduct certain clothing and transportation expenses.
Clothing: a common expense, but atypical deduction
Taxpayers can only deduct their clothing expenses if they must wear certain clothing or uniform due to the nature of their employment and the clothing or uniform is not suitable for everyday wear. So, a server at a restaurant may not deduct their unreimbursed uniform expenses if they are likely able to wear the clothes outside of their work. It does not matter if they do or not; only that they could.
“A server’s uniform is often black pants and a white shirt. Now, if it’s a uniform at a theme restaurant where you wear a dinosaur costume, that would be deductible,” said Nathan Rigney, senior tax research analyst at The Tax Institute at H&R Block.
Because the dinosaur costume is not suitable for off-the-job, everyday use, the server may deduct unreimbursed costume expenses as part of their miscellaneous itemized deductions.
Taxpayers in many occupations, like these, should track and document their clothing expenses as they are more likely going to be able to qualify to deduct these and other miscellaneous expenses:
- Delivery workers
- Health care workers
- Law enforcement officers
- Letter carriers
- Professional athletes
- Transportation workers
- Musicians (theatrical costumes)
- Entertainers (theatrical costumes)
- Military service members (reservists or others who can’t wear uniforms while off duty)
- Carpenters (safety gear)
- Cement workers (safety gear)
- Chemical workers (safety gear)
- Electricians (safety gear)
- Fishing boat crew members (safety gear)
- Machinists (safety gear)
- Oil field workers (safety gear)
- Pipe fitters (safety gear)
- Steam fitters (safety gear)
- Truck drivers (safety gear)
- Coal miners
Mileage traveled after arriving at work and before going home may be deductible
Taxpayers cannot deduct their commuting expenses from their home to their office or other place of work. They may, however, deduct their mileage from their work to other places of business. For example, a salesperson could deduct their mileage from the office to a potential client’s office. Or a lawyer could deduct mileage from their office to the court house.
One special rule for military reservists who travel more than 100 miles for reserve duty allows them to deduct mileage and other travel expenses even if they don’t itemize.
Taxpayers in these occupations should track and document their mileage as they are more likely going to be able to qualify for the deduction:
- Military reservists
- Car sharing driver
- Insurance adjusters
- Residential service providers including electricians, plumbers and carpenters
Itemizing is the key to these tax benefits
Even if employees have qualifying expenses they can deduct, they still have to itemize their deductions to claim the expenses. And in the case of unreimbursed employee business expenses, like uniforms or safety gear, they can only deduct what exceeds 2 percent of their adjusted gross income (AGI).
Still, even if the individual expenses are small, adding them all up can make a difference to the taxpayer’s bottom line and may be well worth the extra work. For example, a taxpayer with a marginal tax rate of 25 percent could save up to $25 for every extra $100 they can itemize over the standard deduction.
For help with their specific tax situation, taxpayers should talk to a qualified tax professional.
Adoptive families may also take advantage of the federal adoption tax credit which is worth up to $13,570 (for 2017) for each child they adopt.
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