How to Use Work Related Tools as a Tax Deduction

You do not have to be in your own business in order to take a deduction for work related tools. If your employer requires you to have certain tools and or licenses, which you must pay for out-of-pocket, you can deduct the expenses from your taxes. Here are a few things that you should do if you wish to deduct work-related tool expenses from your taxes.

Instructions

Difficulty: Moderate

1. Keep track of work related tools that are required by your employer. If your employer requires that you buy certain tools as part of your job, keep an itemized list along with the cost and receipts.
2. Get a hard copy of your employment requirements. Keep a copy of your employee agreement. An employee agreement outlines the terms and stipulations of your employment with your employer. The agreement outlines the necessary tools, education and/or licenses required for the job. Any tools, education or licenses you pursue and pay for out-of-pocket in order to become an employee can be taken as a tax deduction.
3. Deduct the expenses that are required for you to do your job. Once you become an employee and are required to continue your education and or continue to purchase tools in order to do your job, those work related expenses that are paid for out of pocket can be taken as a tax-deduction. If your employer pays for those expenses you cannot deduct them from your taxes.
4. Maintain receipts. In the event the Internal Revenue Service audits your taxes, having a copy of all work related expense receipts will make the audit go much more smoothly.