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

Investment in the contract

The total cost investment in an annuity. When annuity payments are made, the portion allocable to the cost investment is tax free.

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