Miscellaneous Deductions

Miscellaneous deductions are all the deductions that don’t fit into other categories of the tax code. There are two types of miscellaneous deductions, those deductions subject to the 2% limit and those that are not. The 2% limit allows you to deduct only the amount of expense that is over 2% of your adjusted gross income.

Miscellaneous deductions subject to the 2% limit fall into three categories: unreimbursed employee expenses, tax preparation fees, and other expenses.

Unreimbursed employee expenses include:

• Business bad debt of an employee
• Business liability insurance premiums
• Damages paid an employer for breach of an employment contract
• Depreciation of a cell phone or computer that your employer requires you to use with your work
• Dues to a chamber of commerce if membership helps you do your job
• Dues to professional societies
• Educator expenses that are more than you can deduct as an adjustment to income
• Home office or part of your home used regularly and exclusively in your work
• Job search expenses in your present occupation
• Laboratory breakage fees
• Legal fees related to your job
• Licenses and regulatory fees
• Malpractice insurance premiums.
• Medical examinations required by an employer
• Occupational taxes
• Passport for a business trip
• Repayment of an income aid payment received under an employer’s plan
• Research expenses of a college professor
• Rural mail carrier's vehicle expenses.

Tax preparation fees include:

• Tax preparation expenses accrued in the year that you pay them. You can deduct software or filing charges. However, you cannot deduct the convenience charge for paying your tax by credit card.

Other Expenses include:

• Appraisal fees
• Casualty and theft losses
• Clerical help and office rent
• Depreciation on home computer
• Excess deductions of an estate
• Fees to collect interest and dividends
• Hobby expenses
• Indirect deductions of pass-through entities
• Investment fees and expenses
• Legal fees related to producing taxable income
• Loss on deposits in an insolvent or bankrupt financial institution
• Loss on traditional IRA’s or Roth IRA’s
• Repayments of income
• Repayments of Social Security benefits
• Safe deposit box rental
• Service charges on dividend reinvestment plans
• Tax advice fees
• Trustee's fees for your IRA.

Deductions not subject to the 2% limit include:

• Amortizable premium on taxable bonds
• Casualty and theft losses form 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
• Repayments of more than $3,000 under a claim of right
• Unrecovered investment in an annuity.

Additional details about miscellaneous deductions