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Optima Tax Relief Reviews Taxpayers that Qualify for the Employee Business Expense Deduction

Employees that accrue business expenses have the ability to deduct them as an adjustment to their income as long as they fit into the specific employment categories and eligible educators.

Taxpayers can also no longer claim unreimbursed employee expenses as miscellaneous itemized deductions unless they are a qualified employee or an eligible educator. Taxpayers are required to complete Form 2106, Employee Business Expenses in order to take the deduction.

Optima Tax Relief reviews how taxpayers can qualify for a business expense deduction.

If you fall into one of the following employment categories, you are considered a qualified employee:

  • If you are an Armed Forces reservists.
  • You have qualified performing artists.
  • Fee-basis state or local government officials.
  • Employees with impairment-related work expenses.

It is important to know that no other type of employee is eligible to claim a deduction for unreimbursed employee expense.

Qualified expenses fall into the following categories:

  • If it is paid or billed during the tax year.
  • If you have carried out trade or business as an employee.
  • Ordinary and necessary.

Tax Problem Resolution uses all programs, tax codes, and tax payer rights, to rush tax relief and manage, reduce or eliminate tax debt.

IRS guidance also provides rules to substantiate the amount of an employee’s ordinary and necessary travel expenses that are reimbursed by an employer using the optional standard mileage purposes. It is not required for taxpayers to use the method described in the revenue procedure and can instead substantiate allowable expenses as long as substantiation is provided.

Taxpayers should also know that the Tax Cuts and Job Act (TCJA) has suspended the miscellaneous itemized deduction for almost all employees that have unreimbursed business expenses. This includes the cost of operating an automobile for business purposes. Self-employed individuals and certain employees such as Armed Forces reservists, qualifying state or local government officials, educators and performing artists have the ability to deduct unreimbursed business expenses during the suspension.

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