Unreimbursed job expenses are deducted by individuals on Schedule A – Itemized Deductions. If the taxpayer does not itemize his deductions, he will not be able to receive a tax benefit for those job expenses. Job expenses are allowed to be deducted only if they are ordinary costs associated with the individual's job and the expenses were necessary. Unreimbursed job expenses, such as the cost of real estate classes, are subject to an IRS limitation of 2%. This means that only the portion of unreimbursed job expenses that is greater than 2% of the taxpayer's adjusted gross income can be deducted on Schedule A.
Record the amount paid for real estate classes on line 21 of Schedule A. If you are deducting additional unreimbursed job expenses such as real estate licensing fees, include a detailed schedule of all expenses and record the total on line 21 of Schedule A. The detailed schedule should include a description of the expense, the amount paid for each expense and the total expenses paid. Include your name and social security number at the top of the detailed schedule so it can be included with your return if misplaced.
Record all other miscellaneous expenses on Schedule A, lines 22 and 23. Miscellaneous expenses include tax preparation fees, safe deposit boxes and investment adviser fees.
Determine if you are deducting any unreimbursed expenses related to transportation, travel, meals or entertainment. If yes, complete Form 2106 for these expenses and attach to your tax return. Total expenses for which you are claiming a deduction from Form 2106 are reported on Schedule A, line 23. Include the description "Form 2106 Expenses" on line 23.
Calculate the total job and miscellaneous expenses on line 24 of Schedule A. Enter the amount from Form 1040, line 38 on Schedule A, line 25. Multiply line 25 by 0.02 and record the answer on line 26 of Schedule A. If line 24 is greater than line 26, subtract line 26 from line 24 and record the answer on line 27. If line 24 is less than line 26, no deduction is available.