Tax Deductions for Electricians

Tax Deductions for Electricians
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Ordinary thinking would dictate that we work to earn money to buy food, clothing, shelter and extras for family and loved ones. Some trades and occupations, however, are very particular about the prerequisites, the right clothes for the job, the appropriate tools for the work at hand and membership in guilds or trade unions.

To these individuals, it might feel like they work so they can spend money. Of course, these necessities are investments that will pay for themselves. At any rate, they are expensive essentials and professionals like electricians hope the government will recognize that when income taxes are due.

The Work of an Electrician

According to the United States Bureau of Labor Statistics, electricians "install, maintain and repair electrical power, communications, lighting and control systems." Whether through a technical school or through an apprenticeship, electricians receive supervised training before operating independently. Recent evaluations put the median annual pay for electricians at ​$56,900​.

Many of these tradespeople work nights, weekends and even some holidays. In fact, working overtime is not rare but commonplace among electricians. In short, electrical work is demanding but well-compensated and the overall jobs forecast is good for this trade.

The Needs of an Electrician

In most every state in the U.S., an electrician is a licensed professional. Each state has its own specific guidelines but all require more or less than ​8,000 hours​ of on-the-job training before passing from apprentice to journeyman, i.e. the licensed status where you can begin to work independently.

Journeyman electricians are ordinarily restricted to working in residential dwellings. On the other hand, the next level of licensure – known by different names according to state, often master electrician – allows these tradespeople to service commercial properties as well.

Needless to say, obtaining and maintaining a license is not free. Other financial outlays loom large as well. Tools, quality ones, are often expected of an apprentice or journeyman electrician by those who employ them. These include pliers of varying sizes, screwdrivers and nut drivers, wire strippers, fishing tools, power drills and power saws, label makers as well as miscellaneous implements as required by employers and/or customers.

Moreover, those who find work with an electrician service may need to purchase uniforms and safety gear. While these items can last an entire career, the money spent can be considerable.

The Tax Status of an Electrician

Electricians can work for contractors, property management firms, the government, the military or a host of other employers. Alternatively, they can be self-employed. Employers may cover all or none of the cost of the items noted above. Self-employed persons, obviously, must pay for everything themselves.

Accordingly, whoever signs the paycheck determines how much of these expenditures will come out of the electrician's pocket. Yet out-of-pocket work-related charges are not necessarily deductible from electrician income on a tax return. The Tax Cut and Jobs Act of 2018 eliminated many formerly acceptable deductions for employees in favor of larger standard deductions. Self-employed electricians, on the other hand, retain many of them as business expenses.

Where to Note Electrician Deductions

Self-employed electricians who work as independent contractors list their business-related deductions on Schedule C of their tax returns. Carrying the net profit/loss of the Schedule C to ​line 3​ of Schedule 1 and then to your Form 1040 accounts for deductions in calculating taxable income. Prior to 2018, union electrician tax deductions for unreimbursed employee expenses would be itemized on Schedule A but most of those were phased out by the tax reform legislation.