Submitted By: Mark
Answered: July 22, 2014 8:30 am

I work for a company that requires me to supply my own tools. To save money, I buy them at flea markets, usually for cash with no receipt. Can I deduct them?

Unreimbursed employee business expenses can be deducted as a miscellaneous itemized deduction on Schedule A of Form 1040. So you must itemize, and only amounts in excess of 2% of adjusted gross income are deductible. However, this deduction requires substantiation. If your return is questioned by the IRS, you may not be able to convince them of the amount of your deduction. At a minimum, keep a written record of the date, vendor’s name, and amount of each purchase.

Tax Glossary

Installment sale

A sale of property that allows for tax deferment if at least one payment is received after the end of the tax year in which the sale occurs. The installment method does not apply to year-end sales of publicly traded securities. Dealers may not use the installment method. Investors with very large installment balances could face a special tax.

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