How do I claim employee business expenses?
Employee business expenses are costs incurred while performing job-related duties that are not reimbursed by your employer. These expenses may be deductible if they meet IRS requirements and are not considered personal in nature.
Eligible Expenses
You can deduct certain employee business expenses, including:
- Work-related travel expenses (excluding meals for entertainment)
- Gifts given for business purposes
- Educational expenses (tuition, books) related to your job
- Office-in-the-home expenses (if used exclusively for work)
- Trade and professional publications
How to Report Employee Business Expenses
Report your employee business expenses on Form 2106, Employee Business Expenses. Enter the total amount on Line 14b of Schedule 1 (Form 1040), under "Other Adjustments to Income."
Do not include non-entertainment meals on Form 2106, as these are not deductible under current tax rules.
Recordkeeping Requirements
You must maintain detailed records to support your deductions. The IRS requires documentation that includes:
- Date of the expense
- Amount paid
- Purpose of the expense
- Business relationship (if applicable)
Important Notes
- Only unreimbursed expenses are deductible.
- These deductions are subject to the 2% floor for itemized deductions (if you itemize).
- Ensure you are classified as an independent contractor or employee — see Publication 1779 for guidance.
Source:
Publication 463 - Travel, Gift, and Car Expenses
Form 1040 Schedule 1 Instructions
Disclaimer: Always verify details with the official IRS forms and instructions or consult a tax professional. OLT (Online Taxes) provides guidance based on retrieved information but does not offer legal or tax advice.