Using Your Car for Business
When you use a car for business, you may deduct the business-related mileage expense by using either the standard mileage rate or the actual expenses of maintaining the vehicle.

If you use your car for business purposes, you may deduct 36 cents per mile for unreimbursed mileage expenses. Be sure that you keep a written record of your total mileage and business mileage.

If you take the actual expenses, you can deduct the depreciation, gas, oil, insurance, tires, licenses, repairs, etc. If you choose to take actual expenses, you cannot change to the standard mileage deduction method.

The cost of commuting between home and your work is not deductible.

Travel Expenses
You may be able to deduct business travel expenses if you must conduct business away from your tax home and your employer does not reimburse you. The cost of unreimbursed transportation, lodging, laundry, dry cleaning, and telephone expenses are some of the deductible expenses. Generally, meals are only 50% deductible; however, for certain individuals in the transportation industry such as interstate truck drivers or airline pilots, the deductible percentage is generally 65%.

Out-of-town convention expenses can also be deducted if not paid for by your company, so save receipts for your lodging and meals. If the convention was in town, your mileage to and from the convention location may be deductible.

Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation.

Be sure to keep a record of the business purpose and a receipt.

Job-Related Expenses
Office supplies, postage, business cards and long distance charges incurred for your job and that are not reimbursed are deductible.

The uniform your company requires you to wear may also be a deduction. If the uniform is not suitable for everyday wear, the cost of the uniform and the upkeep may be deductible.

Your professional library can also be a source of tax deductions. Books, magazines, and journals related to your field can be deducted. Some of your other expenses that may be deducted include union dues, insurance, and professional licensing fees.

Job-Seeking Expenses
If you are looking for a job in your current profession and can itemize your deductions, certain expenses may qualify as miscellaneous deductions. Employment agency fees, résumé preparation and printing, phone calls, miles driving to and from the interview, and mailing expenses are examples of deductible items. The expenses for an out-of-town interview are deductible if you are paying for them.

Moving Expenses
If you've moved at least 50 miles in the last year and your move was job-related, you may be able to deduct the cost of moving your household goods and your traveling expenses. The standard mileage rate for moving is 13 cents per mile. Allowable expenses are deductible whether or not you use Schedule A and itemize your deductions.

Qualifying Home Office Deductions
A home office may qualify for deduction if it is used as the principal place of business, if you used it exclusively and regularly to meet clients or conduct administrative or management activities of a trade or business, and if there is no other fixed location of the business where you can conduct these activities.

Home office deductions cannot be more than the net income of the home business. If expenses are greater than net income, you must carry over the nondeductible expenses to the following year. If you are an employee, the business use of home must be for the convenience of the employer. Generally, home office expenses for an employee are deductible on Schedule A.

Business Property
If you purchased a computer or cellular phone and you use it for business, you may be able to claim a depreciation deduction. Your employer must require you to have the phone or computer as a condition of employment and you must use them for the convenience of your employer. You must keep a record of the personal and business use of the computer or phone to determine the percentage of business use.

An additional 50% depreciation is allowed for both regular tax and alternative minimum tax on MACRS property with a recovery period of 20 years or less, certain water utility property, certain computer software, and qualified leasehold improvement property acquired after May 5, 2004. The bonus depreciation amount is 30% for property acquired before May 6, 2004. To be eligible for either the 50% or 30% bonus depreciation, the qualified property must be used at least 50% for business, must have been acquired by purchase, and must be original use (used property is not eligible).

If you purchase certain qualifying equipment, you may deduct the cost by making a section 179 expense deduction. For tax-year 2004, the maximum section 179 deduction is increased to $100,000. The maximum amount that may be deducted under section 179 for qualifying enterprise zone, renewal community, and New York Liberty Zone property is $135,000.