Miscellaneous Itemized Deductions

If you have deductible expenses that qualify as miscellaneous itemized deductions, you can deduct certain of those expenses, but only to the extent that they exceed 2% of your adjusted gross income (AGI).  In order to benefit from the deduction for miscellaneous itemized expenses, you must itemize your deductions rather than use the standard deduction.

What is a miscellaneous itemized deduction?

There are three types of expenses that are subject to the 2% limit. They are unreimbursed employee expenses, tax preparation fees and certain other expenses.

Certain unreimbursed employee expenses are deductible as To be deductible, the expense must be:

  • Paid or incurred in the tax year
  • For carrying on your trade or business of being an employee, and
  • Ordinary and necessary

You can deduct other expenses (subject to the 2% AGI floor) that you pay to:

  • Produce or collect taxable income
  • Manage, conserve, or maintain property held for producing such income, or
  • Determine, contest, pay, or claim a refund of any tax

What is the AGI limitation?

You will only benefit from the expenses if the total amount of your miscellaneous itemized deductions exceeds 2% of your adjusted gross income.  Only the excess is deductible.

For example, if you had $850 in unreimbursed employee business expenses during the year and spent $400 on tax preparation fees, your total itemized deductions would be $1,250 for the year.  If your adjusted gross income (from line 37 of your Form 1040) was $55,000, your miscellaneous itemized deductions would be limited to $150 (the amount by which the total deductions, $1,250, exceed $1,100, or 2% of $55,000)

How do I claim miscellaneous itemized deductions?

Miscellaneous itemized deductions are reported on Form 1040, Schedule A (PDF).

For additional information, refer to the Form 1040, Schedule A InstructionsForm 2106 InstructionsForm 2106-EZ (PDF), and IRS Publication 529, Miscellaneous Deductions.

Source: Internal Revenue Service
Last reviewed: February 11, 2015