I am an unioned electrician working in NYC for the State Agency. I incurr about $3,500 to $4,000 in expenses for Union dues, boots, special clothing, tools and continuing education classes.

It is important for me to incur these costs as it is part of my job requirement. How can I deduct these expenses?

As such, the IRS allows these jobs related expenses to be deducted. However, these expenses are subject to the 2% AGI floor. Firstly, lets talk about your job related expenses. Clearly, the expenese you mentioned appear to be reasonable especially in your field.

Employee Business expenses:
The union dues are usually listed on your W-2's, and the bulk of the expenses usually constitute the Union dues. Then the special clothing and boots both very common, along with any special tools required for your job, and additional training and continuing education expenses to gain your professional designation. Please remember to reduce any expenses that are reimbursed by the NYC State Agency. Lets say the total amount of your expenses is $4,000.

2% AGI Floor:
Your total employee expenses are reported on Schedule A of the the Itemized deduction schedule. But, they are subject to a 2% floor. In other words, lets assume your total Adjusted gross income (AGI) as reported on Line 37 of the Tax Form 1040 page 1 is $120,000. Then the IRS rules state that your total employee business expenses must exceed 2% of $120,000, which translates into $2,400.

Thus, the total amount that you can deduct on you Schedule A would be $4,000 less $2,400. This means that the most you can deduct would be between $1,600.

Therefore, take the time to get all your records in order, and save your all receipts to gain the maximum deduction possible.

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