What are Miscellaneous Deductions?
What expenses can you claim as miscellaneous itemized deductions?
You may be able to deduct certain miscellaneous costs you pay during the year. Examples include employee expenses and fees you pay for tax advice. If you itemize, these deductions could lower your tax bill. However, miscellaneous deductions are subject tot he 2% limit.
What is the 2% rule/limit?
You can deduct most miscellaneous costs only if their total is more than two percent of your adjusted gross income.
Examples of miscellaneous deductions
Some examples of miscellaneous expenses that can be deducted are:
- Unreimbursed employee expenses.
- Expenses related to searching for a new job in the same line of work.
- Certain work clothes and uniforms.
- Tools needed for your job.
- Union dues.
- Work-related travel and transportation.
Are all miscellaneous deductions subject to the 2% rule? Can I deduct any misc expenses that are not more than 2% of my income?
Fortunately you can, there are some deductions that are not subject to the two percent limit. They include:
- Certain casualty and theft losses. Generally, this applies to damaged or stolen property that you held for investment. This includes items such as stocks, bonds and works of art.
- Gambling losses up to the amount of your gambling winnings.
- Losses from Ponzi-type investment schemes.
How do I claim miscellaneous itemized deductions?
You can claim miscellaneous itemized deductions on Schedule A (Form 1040 or Form 1040NR). You have to itemize these deductions in order to pay less tax.
What miscellaneous can't be deducted?
Not all miscellaneous expenses are tax deductible There are many expenses that you can't deduct. For example, you can't deduct personal living or family expenses.
For more information, you can read the IRS Publication 529 Miscellaneous Deductions.