Make 2001 Less Taxing
Examples of tax-deductible expenses appear below. Some of these deductions are described in detail in Internal Revenue Service (IRS) publication 529, Miscellaneous Deductions. In most cases, only the portion of your expenses that exceeds 2 percent of your federal adjusted gross income is deductible.
Job-hunting expenses: Costs associated with your finding your first job are not deductible. But unreimbursed job-hunting expenses for subsequent jobs in the same field can be deducted from your federal income taxes. Deductible expenses include employment agency fees, resume preparation fees, and travel and transportation expenses, including mileage.
Licenses and regulatory fees: Licensing fees that you pay to the state in which you practice pharmacy can be deducted.
Dues to professional societies: Membership fees paid to professional societies that help you carry out your job duties may be deducted, although any portion of the fee allocated to lobbying efforts is not deductible. ASHP members can deduct 15 percent of their annual membership fee for 2001, up from 14 percent for 2000.
Employment-related education: Did you pay to attend an educational meeting at which you earned continuing-education credits? Consult IRS publication 508, Tax Benefits for Work-Related Education, to see if your costs are tax-deductible.
Malpractice insurance premiums: According to the IRS, you can generally deduct the "ordinary and necessary cost" of malpractice or personal liability insurance.
Subscriptions to professional journals: Subscriptions to trade magazines and journals related to your profession are tax-deductible.
Work clothes and uniforms: If you purchase laboratory coats or other clothing that is used on the job and is unsuitable for everyday wear, you can deduct the cost of the clothes and dry-cleaning expenses.
Tax preparation fees: Deductible expenses include electronic tax-preparation programs for your computer and fees paid to a professional tax preparer.
Anyone can be audited by the IRS, so keeping good records is important. IRS publication 552, Recordkeeping for Individuals, offers advice about the types of tax-related records you should maintain.