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 Instructions, Form 2106 Instructions, Form 2106-EZ (PDF), and IRS Publication 529, Miscellaneous Deductions.
Source: Internal Revenue Service
Last reviewed: February 11, 2015