The Construction Worker Tax Deduction Checklist

With April 15 just around the corner, it is that special time of year that individuals file their personal income taxes. As we begin to complete our tax returns, individuals may or may not be aware that business related expenses incurred are subject to tax deductions. If your company does not reimburse their employees for these expenses, then the construction worker can deduct those items from their taxes. However, the expenses can only be deducted if they exceed 2% of your adjusted gross income (AGI). For example, if a construction worker’s AGI is $50,000. The 2% AGI limitation would equal $1,000. Any expenses that have reached the threshold over $1,000 can be deducted.

 

Let’s take a look at a few tax deductions that a construction worker may be able to claim:

 

Uniform and Gear

The clothing must be specific to your job and not suitable as everyday clothing. Although you wear jeans and shirts to the jobsite, they are not deductible as they can be used as everyday clothing. However, if you job requires you to purchase a uniform or special clothing such as coveralls then those can be deducted as a specific work related expense. Similarly, personal protective equipment is requirement for your job and a deductible work expense.

 

Uniforms

Dry cleaning for uniforms

Eye protection glasses

Safety gloves

Safety boots

Protective hearing devices

Hard Hats

Respirators

 

While the following may be a requirement for your job, individuals are not able to deduct these following expenses:

 

Business suits

Jeans

Haircuts

 

Professional Development

Work related expenses to improve your skills or further your career qualify as a tax deduction. However, those deductions are limited if they apply to your current job or profession. Unfortunately, if you seek to change jobs or pursue a new trade, any of those educational expenses will not apply.

 

Union Fees

Association Membership fees

Conferences, seminars, and training course

Educational Expenses

Professional Publications such as books or magazine subscriptions

Job Hunting Expenses

First aid courses

 

Business Travel

For any business travel that takes you away from your home for a period of time, you will be able to deduct those expenses. Some travel might include visiting a client, jobsite, vendor, or even a attending tradeshow. The following expenses are tax deductible:

 

Transportation costs incurred include mileage, rental car, train, airfare, taxi, uber, etc.

Baggage fees or shipping costs

Lodging

Meals

Dry cleaning or laundry

Tips for services

 

If you combine your business travel with a personal vacation, there are separate rules regarding deductions of costs. You can only deduct your travel expenses incurred during the business portion of your trip. For example, if you were attending a tradeshow in Orlando for three days, you can only deduct your expenses during the course of the show. If your family attended the trip with you, you cannot deduct any of their expenses. If you extended your stay, you cannot deduct any of the expenses beyond the three-day portion of the trip.

 

Driving Expenses

Whether you are driving to work or taking public transportation, regular commuting costs from home to office are not tax deductible. However, individuals can deduct travel expenses in connection with a work assignment away from home or the main office. Construction workers that commute to the jobsite or travel to the jobsite can deduct those travel expenses. Such everyday travel expenses include:

 

Home to jobsite mileage

Office and a jobsite mileage

Between two jobsites mileage

Parking fees and tolls

 

Tools and Equipment

What is a construction worker without their tools? Many companies supply tools for their employees, but sometimes employees purchase their own if they have a favorite brand. However, if you use the tools for both business and personal purposes, then the construction worker can deduct only a portion of their costs. The construction worker can only deduct the percentage of time that he uses the item for work purposes. For example, a construction worker purchases a set of tools for $500. He uses the tools for work 75% of the time and 25% of the time for personal use. The construction worker can only deduct $375.

 

Tools and equipment

Repairs to tools and equipment

Insurance of equipment

Computer, tablets and smartphones

 

It’s important to remember that expenses reimbursed by your employer cannot be claimed as tax deductions. Since the construction worker already received payment for those items, those items are already considered paid and the employees cannot deduct any of the reimbursed amounts. Individuals must complete a Schedule A for Itemized Deductions (Form 1040).

 

Disclaimer: This is article is for informational purposes only and cannot serve as tax, legal or accounting advice. Readers should consult a tax or accounting professional regarding their specific financial situation.

 

Resources:

IRS

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