Taxes can be stressful, especially if you’re expecting a massive bill from the I.R.S.
Throughout the year, it’s critical that you review your expenses and root out everything tax deductible in order to save some cash. If you incurred out-of-pocket costs in order to build your business, those expenses might be tax deductible.
Typically, you have to be self-employed in order to qualify for these business deductions, but full-time employees may be able to get reimbursed in other ways (see below).
7 Tax Deductions to Grow Your Career
If you’re looking to build your business while saving some cash during tax time, CPA Orumé Hays suggests logging these deductible expenses next time taxes are due.
1. Take a class.
Education and training expenses are tax deductible if they’re related to your line of work. For example, if you’re a freelance writer, you should be able to expense the educational portions of a writer’s retreat or online language classes.
“If there is something you can do to enhance your skills, I encourage you to do it,” said Hays. “Whether you may get a tax break or not, it’s going to pay off in the long run.”
2. Upgrade your home office.
If you’re self-employed and working from home, you should be able to deduct improvements to your office, from a sorely needed paint job to new or upgraded computer equipment. Hays suggests logging every expense related to office supplies.
“If you need to purchase new equipment for your media conferencing, a faster laptop, a web camera – the cost of all those things as well as utility costs are going to be 100 percent deductible for that business,” Hays said.
3. Attend a virtual career fair.
Virtual career fairs are great ways to scope out your industry, learn about job openings and network. Any fees would be tax deductible for a self-employed individual, according to Hays, as long as the career fair is in line with a person’s existing, proven trade.
“The government likes to encourage the American taxpayer to build up their wealth and career,” Hays said. “Training and development is part of those expenses. Any time that you’re picking up new skills, getting a better job or maximizing your revenue – those things are 100% deductible.”
4. Upgrade your phone or Internet.
If you use your phone or Internet for your business, you are entitled to a deduction. You must itemize your bills and demonstrate how much of your usage was for business versus personal in the preceding year. You can also deduct upgrade costs if they are necessary to produce income, said Hays.
5. Boost your subscriptions.
You can deduct any subscriptions if they pertain to your line of work. Netflix is deductible for those in the film industry. A fashion magazine subscription is deductible for a makeup artist. Fitness apps are deductible for personal trainers. A premium LinkedIn subscription is tax deductible for many professionals.
“You may think a magazine is not deductible, but it’s research if it’s relevant to your industry or project,” said Hays.
6. Hit the road.
Your mileage is tax deductible as long as you’re using said mileage for your business. If you drive to a career fair, a job interview, or a site for research for a project, you can deduct those miles on your taxes. Keep an eye on your odometer and log changes throughout the year. You may also be able to deduct other transportation expenses, such as bus fares or car servicing.
“As long as it’s an ordinary and necessary expense for you to run your business, you can deduct it,” said Hays.
7. For full-timers: Ask about an “accountable plan”
Unfortunately, the U.S. no longer allows full-time employees to deduct business expenses on their individual tax returns. However, you may be entitled to reimbursement from your full-time employer for some or all of the expenses above. Log everything and keep every receipt. Often, employers are happy to pay for extra training, and they should be willing to reimburse you for out-of-pocket costs pertaining to their business. Also, they get a tax deduction out of it.
“Ask your employer about their ‘accountable plan,’” said Hays. “Even if they don’t have one yet, you can speak to them about it. It’s something that will be beneficial for them in the long-run.”
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