Miscellaneous Deductions Can Cut Taxes
Posted by William Byrnes on October 15, 2014
Miscellaneous Deductions Can Cut Taxes
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. Here are some things the IRS wants you to know about miscellaneous deductions:
Deductions Subject to the Two Percent Limit. You can deduct most miscellaneous costs only if their total is more than two percent of your adjusted gross income. These include expenses such as:
- 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.
Deductions Not Subject to the Two Percent Limit. Some deductions 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.
There are many expenses that you can’t deduct. For example, you can’t deduct personal living or family expenses. You claim allowable miscellaneous deductions on Schedule A, Itemized Deductions.
William Byrnes' Tax, Wealth, and Risk Intelligence 
Peter said
Professor Byrnes with regards to Schedule A deductions here is an interesting point :
Cost for Legal advice and representation before the IRS because of FBAR penalties and to contest FTF and FTP tax penalties are tax deductible on line 23 Schedule A if > 2% of AGI …..“to having an account overseas – can result in the need for tax and legal advice…..”
To qualify, your legal fees must be: To determine, contest, pay, or claim a refund of any tax ….
http://www.taxalmanac.org/index.php/Treasury_Regulations,_Subchapter_A,_Sec._1.212-1
regards
Peter
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Kim Manley said
Don’t forget the following expenses that can also contribute to the allowable misc. deductions in your return:
Tax Prep fees
Investment fees and expenses
See Publication 529 for a comprehensive list.
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