Miscellaneous Itemized Deductions

Miscellaneous itemized deductions include all deductible items on Schedule A that are not specifically categorized as medical, taxes, interest, charitable contributions or casualty losses. Miscellaneous itemized deductions can be either fully deductible or deductible only to the extent that the total exceeds 2% of a taxpayer’s adjusted gross income. Do you have any miscellaneous itemized deductions that could reduce your taxable income?

Fully deductible miscellaneous deductions include the following:

  • Amortizable premium on taxable bonds issued before October 23, 1986;
  • Casualty and theft losses from income-producing property;
  • Estate taxes imposed on taxable income;
  • Gambling losses up to the amount of gambling winnings;
  • Repayments of income claimed in an earlier year in excess of $3,000; and
  • Job-related expenses of the handicapped.

Miscellaneous deductions subject to 2% of adjusted gross income include the following:

  • Appraisal fees related to a charitable donation or casualty loss;
  • Employee business expenses not reimbursed by a taxpayer’s employer;
  • Hobby expenses up to the amount of hobby income;
  • Investment expenses including fees to collect interest and dividends;
  • IRA, SEP, SIMPLE or self-employed qualified plan custodial fees paid with funds outside the account;
  • Job-hunting expenses
  • Legal fees for collecting or producing taxable income, keeping a job or obtaining tax advice;
  • Professional and union dues;
  • Repayments of income claimed in an earlier year less than $3,000;
  • Safe deposit box fees and the cost of installing a safe in your home;
  • Tax preparation fees;
  • Trust administration fees; and
  • Work clothes and uniforms if required and not suitable for street wear.

The preceding lists are not all-inclusive, but serve to indicate how many different types of deductions are available under this catch-all category. For some taxpayers the total of their various miscellaneous deductions could make a significant difference in their computation of taxable income, but to take advantage of the benefit, taxpayers need to know what can be deducted and where.

Contact Flexible Accounting Services of the Triangle today and let us help you maximize your itemized deductions and receive all the tax benefits for which you are entitled.