I'm a little confused regarding the deduction of a 2% s-corp shareholder deducting unreimbursed expenses as a deduction on Schedule E page 2.  I've read that this is not allowed but in other readings it states: shareholders cannot deduct unreimbursed employee expenses unless these expenses relate directly to corporate business and not the officer or shareholder.  I have a client who is a 40% shareholder and pays for a lot of on the job expenses himself without reimbursement.  Just would like to hear some opinions if possible on this situation.  Thanks