Deducting Military Job Related Expenses


It's tax time, and with tax time comes questions about deducting job related expenses from your tax return.  I've written specifically about uniforms in the past, but today's question is more broad.  The question comes from

I need tax advice on what items I can deduct as work expenses. I'm an active duty military officer filing federal and state in Colorado. Provide references supporting your answers. Specifically, which of the following can I deduct: uniform dry cleaning, haircuts, uniform purchases (uniforms themselves, rank, ribbons/medals), Colorado car registration fees, car mileage to a class I attended but wasn't reimbursed for, hotel expenses for that class since it was like an hour away, conference fee that I wasn't reimbursed for but I was asked to attend for work.
I know that there are tax practitioners that are telling people that they can deduct all these things, but they are generally wrong.  Some have even been charged with crimes for the incorrect tax filing information they were spreading.  The truth is, there isn't much you can deduct, and even if you can, it isn't often that it pays off in the big picture.
There are very few expenses that are actual deductible for an active duty service member. The first issue is that you have to itemize your tax deductions, and your itemized deductions must be greater than your standard deduction. The second issue is that all your combined job related expenses must exceed 2% of your Adjusted Gross Income (AGI) for the year. If you have not spent any time during the year in a Combat Zone Tax Exclusion (CZTE) area and don't have any unusual losses (such as rental losses or business losses, your AGI is going to be at least $36,000 per year. That means that your job related expenses must exceed $720 per year in order to even start to qualify.

Uniforms are usually the most expensive job related expenses for the military. The IRS has deemed that you may only deduct certain uniform expenses. From the IRS Publication 529, Miscellaneous Deductions: "You generally cannot deduct the cost of your uniforms if you are on full-time active duty in the armed forces." There is an exception for any uniform whose wearing is prohibited off base, such as working uniforms.

With regard to the course, and the travel, I would tread carefully. In general, the IRS assumes that your employer will pay for required courses, transportation, and lodging. In particular, they are unlikely to consider "an hour away" to be a hardship distance requiring lodging.

Even once you've found all the allowable deductions, and if you've found enough to exceed 2% of your AGI, and if you've found enough deductions to exceed your standard deduction, you have to calculate how much money this is going to save you and compare it to your overall liability. You then have to consider whether it is worth the effort and the potential flags on your return.

I completely failed to mention that haircuts aren't deductible, nor are car registration fees.  Haircuts are always considered a personal expenses, even if required by your employer.  Car registration fees, similarly, are a personal expenses and not deductible in most cases.  Commuting to and from work does not make vehicle costs deductible.

I know my opinion is unpopular, but it is very uncommon for military folks to be able to deduct business expenses.

For more information on this question, please see:

Can I Deduct My Uniform Costs on My Income Tax Return?

More Questions About Deductible Expenses

Tax Considerations For Reservists

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