In the new Tax Cuts and Jobs Act, the unreimbursed employee expense deduction is completely gone. This deduction was formerly located on line 21 of Sch A under “Job Expenses and Certain Miscellaneous Deductions” and was reported on form 2106. The total amount of the other deduction section had to total over 2% of your AGI but for most people that used the deduction, that wasn’t hard to achieve.
If you’re not familiar with this deduction, you most likely don’t use it because those who do generally spend a considerable amount of time documenting their employee expenses that are not reimbursed. Most of my clients are business owners so those expenses go on the business (Sch C, Corp or Partnership) but this deduction is for people who are required to spend their own money or use their own resources as an employee and are not paid back for it. Salespeople, railroad workers, construction workers, ministers and people that are required to drive a high number of miles in their own car without reimbursement are a few of the people that will be hit the hardest. If a sales person drove 20,000 miles in 2017 with their own car and was not reimbursed, they would be entitled to a $10,700 deduction on form 2106 (assuming that is over 2% of AGI and they itemize). That is a lot money in deductions that will disappear!
Someone I spoke with recently asked me if it was “totally gone”. Yes its totally gone. If you want to remain a W-2 employee and you are required to drive your own car or spend your own money for your job, you may want to consider renegotiating those terms with your employer. Company’s often use the line, “well, you can deduct it on your taxes”. Employees will need to come to terms with eating that cost or petitioning their employers to fork out the cash