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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: cosmie on April 22, 2012, 11:42:18 PM

Title: Scenarios for deducting expenses
Post by: cosmie on April 22, 2012, 11:42:18 PM
Short version: Can you deduct work-related expenses that aren't covered by your employer? If so, what can you deduct?

Long version: I'm an undergraduate student, and for the past two years I've worked in various student positions, changing as funding sources dried up. For the past two semester's I've worked as a TA for a professor's class, however I began doing work for another professor in the same department. This other work involved some light website maintenance, a few graphical tweaks, some event staffing, digital marketing campaigns, random jobs like that. Recently my work has transitioned from being a TA to this other work, and as such I've been required to purchase various items. The department I work for is in the College of Business, and for staffing forums and conferences, meeting clients and corporate partners, etc, I've had to outfit my business-casual and business-formal wardrobe considerably; something I had to do anyway due to internship interviews and such. I've also had to purchase software packages such as Dreamweaver, Photoshop, and Indesign. Total expenditures in 2012 are roughly around $1,000.

Now, most of these would have been bought eventually so I've never thought of them as work-related expenses. However, the purchases were accelerated and necessitated due to work. I've also ran into an expense now that is distinctly due to work: The laptop that I bought just a few months ago, before transitioning to this work, was bought with the intention of having a small, cheap, lightweight computer with a long battery-life to take to classes. As such, it doesn't perform very well when I have all of the software for work open, and often crashes. So now I'm faced with needing to purchase a $1,000 laptop to handle the load required by work, not to mention selling my fairly new laptop and absorbing the loss. I also do most of my work at home rather than at school, since a large portion of it is computer-based, and I could really use a docking station set up with a monitor, keyboard, mouse, etc to make everything easier and more productive. I've hesitated to spend all of the money for the home office setup, however if it's deductible it may be worth it.

Also, in case it matters,  large percentage of what I do in my capacity as a student assistant is online marketing campaign management and website usability optimization for various local clients and other departments in the college. In doing so, I've had to pay for certification exams in Google Adwords and Analytics. I plan on attempting to capitalize on these skills via some independent work. Would it be possible to justify these deductions in this capacity? If so, what would I need to do?

Thanks for all your help/advice!
Title: Re: Scenarios for deducting expenses
Post by: gooki on April 23, 2012, 01:52:57 AM
I the first instance I would ask your employeer to cover some or all of your additional expenses.
Title: Re: Scenarios for deducting expenses
Post by: cosmie on April 23, 2012, 10:17:21 AM
I've broached the subject, but am fairly certain that's not going to happen. From the department's perspective, it's all unnecessary. The software I've purchased is available in the computer labs for student use, so that justifies them not needing to purchase it for me. The fact that running to the computer labs (a ~10-minute one-way endeavor) 5 or 6 times a dayto make tiny little changes is wasteful of my time is irrelevant. As well, the home office is something that would be considered unnecessary, as I have a cubicle that I can use in the department. The fact that said cubicle is shared with 6 graduate students that virtually live in there is irrelevant.

If I were full-time staff, or even a grad student, it'd be a different story. But as an undergraduate student assistant that just happens to work full time, there's only so much they're willing to do (for various reasons, including university regulations). They already had to go through quite a bit of bureaucratic red-tape to raise my hourly wage to what it is, as paying an undergraduate student assistant $20/hr is highly unusual and requires a lot of justification to get approved. My raise also covered my expenses within my first paycheck at the new rate, so in a sense they have reimbursed my additional expenses in the easiest way they could (by raising my wage). So now I'm looking at it from a personal perspective, to see if I can deduct the out-of-pocket expenses for tax purposes.
Title: Re: Scenarios for deducting expenses
Post by: michelle on April 23, 2012, 11:00:46 AM
You can put them on a Form 2106, but to get a tax benefit from doing so you would need to be able to itemize your deductions (ie charitable, real estate taxes, state inocme tax or sales tax, mortgage interest plus the amount over employee business expenses in excess of 2% of your adjusted gross income) would need to be in excess of your standard deduction.   Read the instructions for Form 2106 and Schedule A on the irs website for further information.