10 Job-Related Tax Benefits That Could Save You Some Serious Money
File for less and get more.
Your max tax refund is guaranteed.
There’s more to a good job than a steady paycheck.
Full-time employment can earn you all sorts of perks — from employer-sponsored health insurance to generous deductions on your tax return.
Here are 10 job-related tax benefits that could save you some serious money.
Only pay half of your employment taxes.
Most of us grumble when we see how much money is withheld from our paychecks, but full-time employees have a huge advantage over freelancers and independent contractors when it comes to taxes.
Your employer pays half of your contributions to Social Security and Medicare, while self-employed people have to pay for all of it themselves.
Get help with health insurance.
A lot of employers pay a portion of the monthly premium for an employee-sponsored group health plan.
That’s a huge benefit, but make sure you are getting enough coverage for your family’s needs.
Contribute to an FSA or HSA.
Two kinds of tax-free savings accounts allow you to earmark pre-tax money to help pay for out-of-pocket medical expenses.
Flexible spending accounts (FSA) are exclusively offered by employers, but anyone who has a high-deductible health plan can open a health savings account (HSA).
Make sure you understand the contribution limits and rollover rules of these accounts, especially because you may lose any unspent funds at the end of the year.
Max out retirement savings.
Contributing to an employer-managed 401(k) is a no-brainer: In most cases, you can invest pre-tax dollars, which lowers your taxable income.
Plus, many employers will match a percentage of your contributions up to an annual limit.
That’s free money for your retirement!
Self-employed folks can also put away up to $5,500 in either a traditional or Roth IRA.
Cash in on “home” work.
If you’ve set aside a room in your home that you use regularly and exclusively for work, that counts as a home office.
Using the new simplified method, the IRS lets you deduct $5 per square foot up to a maximum of 300 square feet for a home office.
Deduct job-related supplies and equipment.
If you run your own business or work from home, you can deduct the portions of your mortgage payment, utilities, Internet and phone bills that cover your work space.
You can also deduct the cost of job-related equipment like computers and home office supplies.
Remember that this is only if you itemize deductions, and some deductions have to meet the 2% rule.
Make every mile count.
If you travel exclusively for business reasons, you can deduct most of the unreimbursed costs related to the trip; including gas mileage, plane tickets, car rentals, hotels and even half the cost of meals.
This applies to both employed and self-employed.
One point to keep in mind: Travel to and from your regular place of business — aka your commute — does not qualify.
Save on your dry cleaning bill.
If your employer requires that you wear a special uniform for work, you can deduct the cost of maintaining and cleaning things like clothing, work boots, hard hats and other specialized equipment.
Good examples are clothes police officers, firefighters and theatrical performers wear on the job.
You cannot, however, deduct the cost of any job-related clothing you can also wear outside of work.
Upgrade your education.
If you pay for classes that directly improve your ability to perform your job — and your employer doesn’t reimburse you — you can deduct tuition and fees from your taxable income.
This applies to training required by your employer or classes you elect to take on your own.
Look for a new job.
This tax benefit is pretty amazing.
If you’re unemployed and looking for a new job in your current field, you can deduct the cost of all job search-related expenses, including resume and business card printing, professional placement services, interview coaching, and online job board subscriptions.