Deductions

I am a dentist, classified as an employee of a company. I am paid a base salary, as well as commissions.

- If I buy some of my own instruments to use in the office, can these be deducted?

- Can I deduct meals - I occasionally hold lunch meetings (business- related) where I buy lunch for my assistants.

- Here is a tricky one.... can I deduct miles? I work at 4 different locations. The company does not reimburse me for mileage, but interestingly, the assistants ARE reimbursed by the company for mileage. They choose one office as the "headquarters", and then calculate mileage from headquarters to the satellite offices. On any given day, they (we) all drive directly from our residence to one office -- in other words, we do not meet at "headquarters" and then drive to a satellite. The assistants are classified as employees as well.

I am NOT an independent contractor, so I assume none of the above deductions can be made, but just wanted to make sure. Thanks.

Reply to
martin lynch
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These are unreimbursed employee expenses. You deduct them on line 21 of Schedule A subject to the 2% limitation (namely that only the amount above 2% of your AGI is deductible) and AMT. These restrictions often make the deduction useless. You also fill out form

2106

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I'm not sure whether the meals are 50% or 100% deductible. The following website suggests there is 100% in some cases

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-27&site=tsg A taxpayer can deduct 100% of the food, beverage and entertainment expenses for six or fewer special events held during a calendar year. These events must be held at a particular place of business (such as the taxpayer's business premises, hotel, restaurant, etc.). The food, beverages, and entertainment must be generally available to all employees of the business. This would include events such as a company Christmas party.

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Instruments are assets and must be depreciated over a period of years. Form 2106 does not have questions for depreciation other than vehicle depreciation so maybe you can assume it is section 179 and treat it as an expense and report on line 4 of this form.

You can only deduct miles from your headquarters to another place of business. Commuting miles from your home to headquarters and back are not deductible.

Reply to
removeps-groups

Not: Deductible empoloyee busines expenses must be those the employer refuses to reimburse. I have seen IRS deny them where employee cannot show the employer refuses to reimburse.

Just to clarify, the 2106 is needed for travel and living costs including unreimbused meals, but the cost of instruments go directly to the schedule A, not the 2106.

Some folks might say, who cares, but the 2106 instructions are clear, and if you happened to live in Ohio, where 2106 expenses can be deducted on an Ohio municipal income tax return, it makes a significant difference.

I would phrase it differently, allowing all miles for the business and then reduce by all commuting miles, which are miles between home and a business location and vice versa.

Reply to
Arthur Kamlet

Good point. Also from publication 529

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Unreimbursed Employee Expenses

Generally, the following expenses are deducted on Schedule A (Form

1040), line 21, or Schedule A (Form 1040NR), line 9.

You can deduct only unreimbursed employee expenses that are:

  • Paid or incurred during your tax year, * For carrying on your trade or business of being an employee, and * Ordinary and necessary.

An expense is ordinary if it is common and accepted in your trade, business, or profession. An expense is necessary if it is appropriate and helpful to your business. An expense does not have to be required to be considered necessary.

You may be able to deduct the following items as unreimbursed employee expenses.

END QUOTE

Reply to
removeps-groups

What about the following situation: The employer supplies instruments, but the employee considers them to be low quality, so he buys higher quality models on his own.

I assume he can't deduct these, unless the ones supplied by the employer are so poor that they would not meet the standard of "ordinary" in the industry.

Reply to
Barry Margolin

,

Agreed, but for the tools/instruments, I would also suggest that there's no deduction if the "employee" is the sole shareholder of a "personal service corporation" that he works for. In that situation, I would assert (as a former IRS agent) that the PSC should have paid for them and take the deduction, not the individual.

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-27&site=tsg> >

I also don't like the way it was said by "remoteps" because his answer implies that mileage between two satellite offices (where neither is the headquarters) would not be deductible when it is.

Reply to
D. Stussy

I would think he can.

Purchase of equipment is ordinary and necessary.

The higher-quality equipment is "appropriate and helpful" to his business.

Seth

Reply to
Seth

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