What tax deductions can I claim for my job?

August 9, 2004

From:  Jason
Date:  Sat, 24 Jul 2004
Subject:  mileage deductions?

  1. I just began a job in Massachusetts and I am commuting 133 miles per day to and from work. I am in construction and my workplace changes quite frequently, but most of my company's work is located a good distance from my house. The assignment I have now is a training job for a few months after which I hope to be reassigned closer to home. Do you think I can claim an employee business expense for my transportation costs? What is the standard mileage rate?

  2. My fiancée and I moved to Massachusetts from New Orleans. We used a Penske truck, and she drove her car up here. What deductions can we claim? I moved for my job, and she is also seeking a job.

  3. Can I deduct the cost of tools that I buy for my work?

Answer

Date:  Fri, Jul 30, 2004

Hello Jason,

  1. This is actually a difficult question. A taxpayer may deduct daily transportation expenses incurred to travel between the taxpayer's residence and a temporary work location outside the metropolitan area where the taxpayer lives and normally works. A taxpayer who doesn't normally work in the metropolitan area in which he or she lives doesn't qualify for the deduction. A taxpayer was able to claim the deduction when he worked at his employer's local field office 25% - 27% of his working days and worked at various temporary locations on the other days. If, after your training job period, you can get your job requirements to fit this situation of having local work assignments in addition to the out of town assignments, you should be able to qualify for the deduction. The standard business mileage rate for 2004 is 37.5¢ per mile. This deduction is claimed on Form 2106 and Schedule A as a miscellaneous itemized deduction (not deductible for AMT.)

  2. Go to the IRS web site (www.irs.gov) and see IRS Publication 521 on Moving Expenses. Your fiancée needs to find a job within one year of the move to qualify to claim her expenses. The deduction is claimed on Form 3903 and is deductible as an adjustment to gross income (line 27 on 2003 Form 1040.)

  3. Employees can deduct expenses relating to tools that they buy for their work. If the tools have a useful life exceeding one year (they aren't supplies), they should be depreciated. See IRS Publication 535. This deduction is claimed on Form 2106 and Schedule A as a miscellaneous itemized deduction (not deductible for AMT.)

Good luck!
Mike Gray

For answers to new questions, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight by filling out the form below.


Home    Newsletter Archive    Introducing Michael Gray, CPA    Articles    Tax FAQ   Need Help?    Other Links


Michael Gray, CPA
2190 Stokes St. Ste. 102
San Jose, CA 95128
(408) 918-3162
FAX: (408) 998-2766
Hours: 8am - 5pm PDT Monday - Friday

Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Connect on Google+
Our Blog

Sign up for our free monthly newsletter,
Tax & Business Insight,
for the latest tax news!

subscribe html
unsubscribe text only

We respect your email privacy!