Can you deduct these?

My husband just got a promotion as a quality manager for a home builder. He no longer has an office, but works out of his truck. They pay a portion of his gas expense every month but one of his coworkers told him he could deduct his truck, some of our apartment rent and utilites from our taxes. Does that sound right? If so, how much and If not, what can you deduct?

He isn't self employed...he works for a nationwide homebuilder...he just doesn't have an office

No, that doesn't sound completely accurate. Let's start from the beginning of your question. You mentioned that your husband's employer is paying a portion of his gas expense. If he is receiving a straight, let's say, $200 per month, your husband can deduct vehicle expenses that exceed that $200/month on Form 2106 (I'll go into more about that form later). In order to know what that number would be, your husband is going to need to keep track of all of his business expenses related to driving. He can do that only by keeping a mileage log, marking down beginning and ending odometer readings for the work related mileage. He should also keep track of his gas receipts, because you have the option of choosing between using actual truck expenses (gas, oil, depreciation, loan interest) based on the ratio of business use/total use, or the standard mileage rate of 44.5 cents per mile. Most people opt for the standard mileage rate because it's a bit easier to deal with, but it may not be the most tax efficient method. Also, with either method used, anything paid for tolls or parking can be added to that mileage figure. All of this is shown on Form 2106, which can be found on the IRS's website at http://www.irs.gov.

As far as deducting a portion of your rent and utilities, that's a bit of a stretch. In order to do that, you need to have a room of your apartment that is exclusively used for a home office (that means no bed, no washer and dryer, etc.), and the office must be for the convenience of your husband's employer, not your husband. If you do have an area like that, then you can calculate the deduction by figuring out your total rent paid, utilities paid (but not water) and multiply it by the ratio of business sq footage/total sq footage of the apartment.

Unfortunately, the real kicker about all of this is the fact that it must go on Form 2106. The information from this form moves to Schedule A, Miscellaneous Itemized Deductions, and is subject to the 2% adjusted gross income limitation. Meaning, if you had $2,000 of deductions on Form 2106, and $75,000 of adjusted gross income (AGI), $1,500 (2% of $75,000) would be deducted from your $2,000 in expenses, giving you a net deduction of only $500. Yuck! Since you're renting, there's a pretty good chance you probably can't even itemize.

Isn't tax law grand? :(

You can deduct actual business miles and depreciation for the truck. As far as deducting part of your apartment rent, you would have to be able to show that you had a room exclusively used for the business. It cannot be part personal/ part business. If the room was 20% of the suare footage of your apartment, you could possibly deduct that also.

You should get all the publications to get the real facts at www.irs.gov

yes you can deduct a portion of your rent and utilities. It is based on what portion of the home he uses for his office. if you live in a 1000 square foot home and he use 100 square foot for office, which is 1/10th he can count 1/10th of the rent and utilities as his office expense. He can also claim the mileage that he uses on his truck, but he has to keep records of when it is used for business and when it is used for personal.

Check the taxation law in your state. Your husband's business can be treated as a home office.

Aya

You can deduct a portion of all of the following,
Rent
Car and fuel(with reciepts)
You can also claim for a percentage of,
Laundry,parking,elec/gas/telephone bills,you as a seceratary,work clothing,stationary basically anything that he uses that is work related the list is endless just ask the tax man for a break down of what he can cliam for and they will provide you with a list ;-) hope this helps.

You can deduct just a few of them

He has a right to deduct the expenses incurred as a result of his trade/business. How and where he deducts them depends on the relationship between him and his "employer." Regardless, he will also need to pick up the reimbursement for his fuel. In addition to pro-rating business vs. personal portions of his various expenses, his vehicle may be subject to "luxury auto" limitations.