Tax Deductions for General Laborers
Whether you works as a PC repair man, electrical technician, tradesman, craftsman, repairmen, painter, handyman, forklift operator, machinist, or other general laborer, you'll likely receive a Form W-2, Wage and tax Statement if you are employed by another entity. If you do work on the side, or are not employed by an organization, you're considered to be self-employed, in which you'll report your income on a Schedule C, Profit or Loss from Business. In some cases of self-employment, the client may provide you with a Form 1099-MISC, Miscellaneous Income, however you have to report all income to the IRS whether or not you receive a 1099. Any net profits of $400 or more are subject to self-employment taxes, including Social Security and Medicare taxes, and you may be required to make estimated tax payments in order to cover the amount you report on the Schedule C.
It's possible you can reduce your tax liability by claiming unreimbursed job-related expenses as deductions. If you are an employee, you can claim the expenses on a Schedule A, Itemized Deductions. Self-employed laborers deduct expenses on a Schedule C. You'll need to keep receipts to prove any costs you claim. Examples of job-related expense deductions include:
- Subscription fees for trade publications or journals
- Union dues or professional affiliation fees
- Liability or wrongful acts insurance premiums
- Hardware or equipment replaceable within the year
- Safety and protective equipment
- If uniforms are required, and not suitable for everyday streetwear, then the upkeep and cost can be deducted
- State or local administrative fees, flat rate occupational taxes, or licensing costs if not for initial certification.
If you experience a period of temporary unemployment, you may be able to deduct expenses related to seeking new employment, as long as you're looking for a job in the same industry. Having odd jobs during doesn't immediately disqualify you from deducting job hunting expenses.
Any educational courses you take relating to your job can be deducted if you weren't reimbursed for the expenses and the classes meet specific requirements. The class can't help you meet minimum requirements for your job, or be used to help you get a new job or career.
Self-employed laborers may be able to deduct additional expenses on a Schedule C including:
- Bad business debts
- Travel costs for getting from one job site to another
- Employee compensation, including bonuses and commissions
- Advertising costs
- Repair costs for tools and equipment
- Supplies and incidentals
- Excise taxes and individual property tax
- Business property rental costs
- Legal and administrative fees
