Miscellaneous Tax Deductions: Can I Deduct That?

Find out what miscellaneous expenses can be deducted (from your taxes) and what cannot be deducted, and where they go on a tax form.

Do you ever wonder if certain things are deductible on your tax return? I have a friend who often does and asks, although it's mostly in jest. For example, a few of us will be swapping stories and if the cost of ________________ is offered and/or involved in a story, then he will ask if ________________ is deductible.

Surprisingly enough, the answer is mostly "no," but there are a lot of miscellaneous deductions that you can deduct and the IRS offers an excellent resource in Publication 529, Miscellaneous Deductions, to answer some legitimate miscellaneous tax deduction questions.

First, you generally take these deductions on IRS Schedule A so you have to be itemizing (your deductions as opposed to taking the standard deduction based on your filing status) in order to get any benefit.

Second, there are miscellaneous deductions that are subject to the 2 precent of Adjusted Gross Income (AGI) rule and there are miscellaneous deductions that are not subject to the 2 percent of AGI rule and there are expenses that you simply just cannot deduct.

The 2 percent of AGI rule basically says that you can claim the amount of expenses that is more than 2 percent of your AGI. More on that is here.

Deductions subject to the 2 percent limit are offered in the following three categories in IRS Pub 529.

  • Unreimbursed employee expenses

  • Tax preparation fees

  • Other expenses

Examples of potentially deductible unreimbursed employee expenses include dues to professional societies, job search expenses in your present occupation and union dues and expenses. The full list of them is here. Also, with unreimbursed employee expenses, you may need to attach form 2106 or 2106-EZ. Other expenses that can be deductible include depreciation on home computers used for investments, Investment fees and expenses and Trustee's fees for your IRA, if separately billed and paid.

The list of miscellaneous deductions not subject to the 2 percent of AGI rule includes:

  • Amortizable premium on taxable bonds.

  • Casualty and theft losses from income-producing property.

  • Federal estate tax on income in respect of a decedent.

  • Gambling losses up to the amount of gambling winnings.

  • Impairment-related work expenses of persons with disabilities.

  • Loss from other activities from Schedule K-1 (Form 1065-B), box 2.

  • Losses from Ponzi-type investment schemes.

  • Repayments of more than $3,000 under a claim of right.

  • Unrecovered investment in an annuity.

And finally, the list of nondeductible expenses? Well, it's a bit lengthy (Full list here) and goes from Adoptions fees down to Wristwatches.

IRS Pub 529 offers all the details and explanations. Also useful might be IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses, as it includes employee business expenses of officials paid on a fee basis and performing artists.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.


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