Employees and bosses, rejoice! National Boss Day is once again here. The day of celebration began in 1958 when a State Farm Insurance secretary wanted to show her appreciation for her boss, who was her father. She chose his birthday for the celebratory day, and that has now become a day to recognize the hard work and dedication of bosses everywhere. Hallmark even has a growing line of special cards for the day.
Whether you are an employee or a boss, mid-October is also an excellent time for tax planning. If you work for someone else, it may seem that your tax situation is cut and dried compared to business owners, and that you have no opportunity for tax deductions, that is not the case.
Even if you don’t have your own business, you may have some expenses that are tax deductible. If you are a salaried professional, teacher or other employee, here are some tax deductions you shouldn’t overlook.
- Dues for professional organizations
- Personal supplies, such as pens, pencils, briefcases, calculators, executive diaries, etc.
- Fees for credit cards used exclusively for business
- Educational expenses for courses and seminars that add to your professional expertise
- Gifts to business associates, up to $25 each
- Cost of office decoration
- Fifty percent of the cost of business lunches and entertainment, including entertaining at home
- Business use of your automobile, and local transportation for business purposes
- The cost of commuting between two jobs (but not the cost of commuting from home to work or back again)
- Business use of your home phone for long-distance and toll calls
- Unreimbursed costs while away from home on business, including lodging, transportation, laundry and dry cleaning, tips, and 50% of meals.
These expenses may be tax deductible as miscellaneous deductions on your tax return, which means you must itemize your deductions to claim them. In addition, only the portion that exceeds 2% of your total adjusted gross income is tax deductible.
Since there are limitations , you might want to ask your employer to reimburse you for these expenses as additional employee perks, or even in lieu of a raise. The employee reimbursement won’t be taxable to you.
If you have any of these expenses be sure to organize your receipts. If you have tax receipts stashed here and there, gather them together in one place and make a list of them. Review your check registers, bank statements and credit card statements to be sure you garner them all. Don’t ignore these extra deductions: tossing out $100 of deductible receipts is like throwing $30 in the trash. And don’t forget to include end-of-year credit card purchases for deductible expenses. They are tax deductible when you charge them, even if you don’t pay the credit card statement until the next year.
Don’t worry about knowing these rules. TurboTax will ask you simple questions related to you and give you the tax deductions and credits your eligible for.