ARE MY EMPLOYEE BUSINESS EXPENSES STILL DEDUCTIBLE?


ARE MY EMPLOYEE BUSINESS DEDUCTIONS STILL DEDUCTIBLE?

The Tax Cuts and Jobs Act (TCJA) introduced many new changes to the tax law. One of these changes is that unreimbursed employee (business-related) expenses are no longer deductible as an itemized deduction on your Federal tax return. This has been a significant deduction for many of my clients in the past.


Luckily, the deduction is not entirely lost.


Not all states conform to all the changes the IRS makes on the Federal return level. Two of these states are New York and California. Both of these states STILL ALLOW A DEDUCTION FOR UNREIMBURSED EMPLOYEE (BUSINESS-RELATED) EXPENSES on their corresponding state tax returns!


This means the following deductions are still allowable at the state level for residents of New York and California:


  • Union dues

  • Job travel

  • Books

  • Supplies

  • Subscriptions

  • Computers

  • Cell phones

  • Occupational taxes

  • Uniforms

  • Job-related education expenses

  • Tax preparation fees

  • Investment expenses

  • Safe deposit box fees

  • Legal fees

  • Gambling losses to the extent of winnings

  • Margin account interest


As of the time of this writing, New York and California are the only two states that we know of that still allow a deduction for these expenses.