7 Tax Deductions Engineers Can Claim on Their Taxes

If you haven’t yet filed your taxes and work as an engineer, check out these seven common tax deductions that could minimize your tax burden this year!

Tax Deductions for Engineers

Engineers can receive tax deductions for different aspects of their jobs. The best tax deductions for engineers follow.

1. Advertising

You can claim a tax deduction for advertising expenses. Since advertising covers a broad field, here’s what is deductible:

• Advertising in magazines or on cable or TV.
• Costs of advertising events, such as promotional events or publicity campaigns. 
• Costs of business cards, brochures, and web pages.
• Online activities, including email newsletters and online advertising.
• Promotional and public relations expenses, like caps, mugs, pens, and t-shirts.
• Radio advertisements, including costs of production.

2. Car Use and Truck Use

If you own an engineering business or you’re a self-employed engineer, you may qualify for car or truck-related deductions. Before claiming a tax deduction for car or truck usage, you’ll need to consider how you use your vehicle.

You’ll only claim a deduction only for the business portion of when you drive your vehicle. Personal use of your vehicle won’t qualify for this type of tax deduction.

You can determine expenses in two ways: you can use actual costs or use the standard mileage rate. Actual expenses cover: 

• Depreciation
• Gas and oil
• Insurance
• Lease payments
• Registration fees
• Repairs and tune-ups
• Tires

The standard mileage rate is available for you as an alternate option.

• For 2022, the standard mileage rate for cars and trucks is 62.5 cents per mile.
• For 2023, the standard mileage rate is 65.5 cents per mile.
• If you’re leasing your car for business use and you want to take the standard mileage rate, you’ll use this rate for the entire lease period.
• You’ll use the standard mileage rate if you own a car and use it for business purposes during the first year.

3. Insurance

Engineers can claim deductions for insurance costs. Engineering insurance comprises several insurance types, including:

• Commercial Property 
• Cyber Liability
• General Liability
• Professional Liability
• Umbrella Insurance
• Workers’ Compensation

4. Meals

While you might not consider business meals to be deductible as an engineer, they are deductible under the circumstances. Business meal costs are 50% deductible if:

• The cost of the meal or beverages isn’t extravagant or lavish.
• The meal has an ordinary and necessary business purpose.
• The meal is with a business contact, such as a consultant, customer, employee, or vendor.
• You have lunch with a business owner. 

You can also deduct meals as an engineer if you provide meals to your employees. There are two scenarios in which the rate is 50% deductible:

• Meals are 50% deductible if you travel for all-employee events or to have business meals.
• Meals are 50% deductible for employees at the employer's location, such as at a break room or cafeteria.

5. Office Supplies

If you use office supplies in the last tax year, you can also claim the tax deductions expenses. You can claim 100% of the costs paid for office supplies. 

Before claiming this deduction, there are some things that you should know. As of the 2016 tax year, you can deduct business assets, including office assets, up to a specific cost:

• Office supplies costing $2,500 or less are deductible. (This includes item cost and costs to set up the item.)
• Items costing more than $2,500 are depreciable, and you must spread out these costs over the years. 

6. Travel

As an engineer, you may know that you are eligible for tax deductions for travel. However, you qualify for deductions for different forms of work-related travel.

If you travel for business-related work duties, you can deduct costs for: 

• Airport limousines, commuter buses, or taxis used to travel from an airport or hotel to your business location.
• You can deduct costs for baggage delivery or business material shipments between your regular work location or tax home and your temporary work location.
• Lodging and meals
  • You can deduct lodging and meal costs while doing business travel.
  • You have the option of submitting actual expenses or using per diem rates.
  • While business meals are deductible up to 50%, entertainment expenses aren’t deductible for business purposes.
• Transportation
  • You can deduct travel costs by bus, car, plane, or train between your business destination and your home. 
  • You can’t deduct the cost of a free ticket. 

You can also deduct business-related travel costs for:

• Conventions
  • You’ll need to show that your attendance at a convention benefits your business or trade.
  • There are special rules if you must attend a convention outside of North America.
• Cruises
  • The amount you’ll deduct for cruises is twice the allowable federal per diem rate for your travel period.
• Expenses incurred or paid in connection with a temporary work assignment away from home.
  • You can’t deduct travel expenses for indefinite work assignments. 
  • An indefinite work assignment lasts for more than one year.
• What the IRS deems necessary and ordinary expenses that require you to travel away from home for your business, job, or profession.

7. Work-Related Education Expenses 

Finally, you may qualify for a tax deduction based on work-related education expenses. As an engineer, you can deduct work-related education expenses if you’re a: 

• Disabled individuals with impairment-related education expenses
• A fee-based local government official
• Self-employed individual

There are two requirements to receive tax deductions for work-related education expenses. First, your expenses must be for education that improves or maintains work skills. Second, your expenses must be for education that a law requires you to keep your current job, salary, or status.

Some work-related education expenses you can deduct are: 

• Books, lab fees, supplies, tuition, and similar items
• Certain transportation and travel costs
• Other educational expenses, such as the costs of researching and typing

Let Us Help You With Your Tax Needs

As an engineer, it’s critical to know which tax deductions you can take to significantly reduce your taxable income. It's also very easy for business owners to forget or overlook some tax deductions. If you’re unsure of which deductions you qualify for or have questions about your taxes, seek out the advice of a professional accountant.

Not only can they answer any questions you may have but they can also handle your taxes for you— making your tax seasons a lot less stressful. Work with 1-800Accountant for help with your help with taxes and tax deductions.