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February 27, 2005

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It's tax time: What's deductible for EMS and fire personnel

By JOHN HULTGREN
Kentucky EMS Connection

LOUISVILLE There's less than two months to go before it's time to pay the federal piper by April 15. While everyone is obligated to pay their income taxes, there is absolutely nothing wrong making sure you don't overpay. And a good place to legally save some money is in the deduction area.

Deductions are an area of tax law that is open to a lot of interpretation. Frequently, what one tax preparer says you can do, another says you can't. Since your signature goes on the bottom of the tax return, you are responsible for its contents, so it is very worthwhile to make sure that you are only claiming deductions you are legally entitled to claim.

Here are some typical items public safety responders take deductions on. But first a word of caution: this isn't tax advice you can rely on, but a discussion of typical deductions as discussed by a CPA and tax attorney.

  • Meals: Firefighter/EMS/Rescue personnel can deduct a contribution to a meal fund at their station only if it is required by the employer as a condition of employment and only when they actually put the money in.
  • Cell phones and pagers: The IRS takes the position that cell phones and pagers are not deductible for paid personnel unless required by the employer as a condition of employment and then only to the extent the cell phone or pager is used in that employment. It is up to the tax filer to prove it through records.
  • Uniform cleaning and supplies: Generally, if the employer has a policy stating the required uniform and also doesn't pay for uniform items, then you have a deductible item.
         Uniforms can be tricky, however. The case law says that if you are required to purchase clothing for your job, but are not limited in how you can use that clothing off-duty, then the clothing is not deductible. However, if the employer restricts use of the clothing, then it might be deductible.
         You can also argue that clothing which is not "general clothing," or clothing which is "safety oriented," is also deductible.
         For example, a police officer's bullet resistant vest is not considered "general clothing," so that is deductible. Uniforms with patches that the employer says you can't wear unless authorized are deductible.
         However, while most police officers don't go to the grocery store with a t-shirt that says "POLICE TACTICAL TEAM" on the back, most public safety agencies don't care if you wear a t-shirt with a fire or EMS logo on it to the grocery store. In those cases, the t-shirt could be considered "general wear" and would not be deductible.
  • Travel from one job to another: Travel from one job to another has always been deductible, but you must keep written records to prove it. The easiest way to keep these records is to buy a small pocket calendar and list where you go and the miles. Travel from home to the first job site, and travel from the last job site to home, is never deductible, even if you have to lug around all your gear.
  • Union dues: These are deductible.
  • Continuing education: Continuing education costs, including reasonable costs for getting there, are deductible. Educational costs are only deductible if it helps you maintain your current job, or if it keeps you competitive within your current job. While this area is frequently open to debate, the key is that you need the education for your current job and that the education does not prepare you for a new type of job. It appears that the debate on whether an EMT-Basic can claim the costs of paramedic education remains a gray area.
  • Paid vs. volunteer: Unpaid public safety personnel have different rules for some items. If you are a volunteer, then you are donating your time to a government and if you incur out of pocket expenses that are reasonable, then those expenses are deductible. However, reasonable is sometimes hard to define.

Of course, all of these deductible items are meaningless unless you actually itemize your deductions. And once you add up your deductions, only the portion that exceeds 2% of your adjusted gross income actually gets taken off.

Many EMS workers can do better just claiming the standard deduction.

However, both the federal and state governments have different standard deductions (Kentucky's is lower), so you might benefit from claiming the standard deduction on your federal return and then itemizing on your Kentucky return.

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