Many deductions were either eliminated or expanded after 2017’s Tax Cuts and Jobs Act. One of these deductions that has gotten a lot of attention is the employee business expense deduction.
To keep employed individuals on the same footing as a self-employed individual who has seemingly unlimited tax write-off capabilities, employees have been able to deduct any unreimbursed expenses that they incurred against their income on their tax return for many years.
Starting in 2018, if your boss is unwilling to reimburse your business expenses, however, you will no longer be able to deduct these on your tax return.
This has caused a lot of frustration among many individuals who have tracked their expenses and mileage on their car, finding that being able to deduct these expenses against their income was a middle ground to not being reimbursed at all.
What Kind of Expenses Used to Be Deductible?
It’s important to know what expenses were deductible so individuals are not looking for a place to put them in their tax return software this year.
Any extra miles tacked onto your car besides the ones that got you to your first work station for the day would have been deductible.
Any clothes bought for work that only had a practical purpose of being worn at your place of employment would have been deductible.
As an employee, if you had to buy your own tools, you could have written them off at the end of the year.
Anything Else That Only Had a Primary Purpose of Being Used at Your Job
If something that you bought for work only had one purpose and that purpose was for use in employment, it could be written off at the end of the year.
So What Can I Do About This?
Talk to your employer about being put on an accountable plan. An accountable plan is to help reimburse employees for any business expenses that they incur.
Recordkeeping around an accountable plan will involve filling out expense reports and keeping track of miles, but getting money back for putting extra miles on one’s car driving between worksites is a fair trade-off.
Why Would My Boss Want to Do an Accountable Plan?
Normally, when your boss pays you wages they are taxed on those wages beyond what they withhold for you. With an accountable plan, these wages go un-taxed, therefore giving them a small caveat to reimbursing you.
This article does not constitute legal, financial, or tax advice. For help regarding your specific situation, please consult a local professional.