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Can You Deduct Employee Expenses That Are Unreimbursed?

If you pay for job-related expenses and your boss doesn’t pay you back, can you deduct what you spend on your taxes? With the countless rules of taxes constantly changing, it can be hard to keep up. The topic of unreimbursed employee expenses is especially complex since the rules changed rather recently with yet another change scheduled on the horizon. Allow Maggi Tax to catch you up to speed and prepare you with what to expect in the near future!

The Tax Cut and Jobs Act Explained

The main factor that’s controlling your ability to deduct unreimbursed expenses as an employee is the Tax Cut and Jobs Act. This act was put into effect in 2018 to stop employees from itemizing any unreimbursed expenses on their tax filing. Before this act was created, employees were able to deduct their spending as long as the total expenses came out to over 2% of their adjusted gross income.

Examples of these employee expenses included:

  • Supplies for job use
  • Business travel costs
  • Organization and union dues
  • Any other unreimbursed expenses pertaining to the job

Why does it matter to learn about what it was like to deduct these unreimbursed expenses if it’s no longer possible to do so? Pretty soon, the Tax Cut and Jobs Act will be revoked so that employees can once again save on taxes using this method.

Can I Still Make Itemized Deductions If I’m Self-Employed?

 

The Tax Cut and Jobs Act only applies to taxpayers who are hired into a place of employment. If you are self-employed, you are still able to itemize your expenses when filing your taxes from notepads to computers and anything else you’re buying to assist with your job.

Unreimbursed Deductions May Come Back For 2026

The Tax Cut and Jobs Act is set to be retracted in 2026, allowing employees to once again deduct any unreimbursed spending relating to their area of work. If it’s anything like before, the same rules and processes will still apply. This includes the requirement that your total spending must exceed 2% of your adjusted gross income. If this will be your first time deducting unreimbursed expenses, or you just want to ensure that you’re going about it the right way, you have time to prepare for the change by seeking counsel from a trusted financial advisor near you.

How To Prepare For The Upcoming Changes

You can get a head start in preparing for the upcoming changes by getting into the right mindset. Get into the habit of jotting down any unreimbursed expenses that you make relating to your job and calculate your total to see if it reaches the qualifying amount. You will have about a year or so to get into the habit of recording the necessary data, but to guarantee effective ways to maximize your taxes, the best thing you can do is to meet with a reputable tax person and come up with a strategy that works for you.

Let Maggi Tax Help You Conquer The Ever-Changing World of Taxes!

At Maggi Tax, we are always staying informed and updating our practices to meet the changing rules and qualifications that happen every tax year. Call us today at (727) 799-1701 to schedule a consultation with a reliable tax advisor near you and to find the best financial plan that fits your goals and needs with our tax advisory services!

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