Assuming the Pay Pal charges are an unreimbursed employee business expense (from your remote job, which you are paid on a W-2), which would be defined as follows:
- An ordinary expense is one that is common and accepted in your field of trade, business, or profession.
- A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be required to be considered necessary.
Before 2018, any employee with unreimbursed work expenses could use Form 2106 to claim those expenses as a miscellaneous itemized deduction
Currently Form 2106 may be used only by Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses because of the suspension of miscellaneous itemized deductions subject to the 2% floor under section 67(a) by section 67(g).
So, on the Federal level these are the only situations under which this could be a deductible expense, if if is an unreimbursed employee expense.
The following states allow unreimbursed employee expenses on the state tax returns:
- Alabama.
- Arkansas.
- California.
- Hawaii.
- Maryland.
- Minnesota.
- New York.
- Pennsylvania.
The question of rent, or the portion of the unit that is used as a home office and is necessary an expense that is one that is helpful and appropriate for your business, could be deductible on Form 2106 in one of the states above as well. The portion of rent for the home office only would be deductible on Form 2106 in one of the eight states above.
Thank you for the opportunity to answer your questions @Dorothygael
All the best,
Marc T.
TurboTax Live SelectTime Tax Expert
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