Mistakes on one's federal tax returns can expose a person to considerable troubles. Such errors could lead to a person facing Internal Revenue Service scrutiny and collection tactics.
One type of tax error that can be particularly problematic is claiming a deduction one isn't actually entitled to. One area where individuals sometimes fall into deduction mistakes are deductions for work-related expenses.
There are a variety of work-related expenses individuals who are self-employed can claim. Individuals who work for someone else may also have some deductions available related to work expenses, but the amount of available deductions for such individuals is much more limited.
There are strict rules regarding what is and is not deductible when it comes to work-related expenses. These rules can be complicated. For example, the rules regarding deductions for work clothing are complex, so these deductions could trip a person up if proper care isn't taken. When it comes to work clothing, whether it is deductible depends in part on whether the clothing can be used in contexts other than one's work. If it can, it generally is not deductible.
Thus, when thinking of trying to deduct a work-related expense on one's federal taxes, it can be very important for a person to check to make sure the deduction would be valid and acceptable under federal tax law.
When a person has been accused by the IRS of claiming an invalid deduction in relation to work expenses or other deduction mishaps, they should talk with an experienced tax lawyer about what actions they could take in response to the allegations.
Source: Money, "12 Tax Slipups to Avoid," Ingrid Case, Feb. 18, 2016