Miscellaneous itemized deductions are certain nonbusiness expenses that individual taxpayers who otherwise itemize deductions may take against their taxable income. Such miscellaneous expenses are allowed only to the extent that they exceed two percent of a taxpayer’s adjusted gross income. Miscellaneous itemized deductions may also be limited by the overall itemized deduction phase-out.
These expenses include employee business expenses, expenses of producing income, expenses related to filing tax returns and certain hobby expenses. Specifically, the miscellaneous itemized deductions available to a taxpayer are the following:
- Professional society dues
- Employment-related educational expenses
- Home office expenses
- Professional books, magazines and journals
- Work clothes and uniforms
- Union dues and fees
- A portion of unreimbursed business-related meal and entertainment expenses
- Other unreimbursed employee business expenses
- Employee expenses for which reimbursements are included in income
- Rental of a safe-deposit box
- Expenses incurred for tax counsel and assistance
- Costs of work-related small tools and supplies
- Investment expenses
- Fees paid to an IRA custodian
- Certain expenses of a partnership, grantor trust or S corporation that are incurred for the production of income
Additionally, there are some miscellaneous expenses that are not subject to the two percent of adjusted gross income limitation. These include the following:
- Bond premium amortization for taxable bonds
- Gambling losses for the year up to the extent of gambling winnings
- Casualty and theft losses associated with income-producing assets
- Federal estate tax on income in respect of a decedent
For more information about this article, please contact our tax professionals at taxalerts@windes.com or toll free at 844.4WINDES (844.494.6337).