taxmap/pubs/p529-000.htm#en_us_publink100026899taxmap/pubs/p529-000.htm#en_us_publink100026901Limit on itemized deductions.(p1)
For 2010, the dollar limitation for itemized deductions based
on your adjusted gross income has expired.
taxmap/pubs/p529-000.htm#en_us_publink1000252793Certain property eliminated from the definition of listed property.(p1)
For tax years beginning after 2009, cellular telephones and similar
telecommunications equipment have been removed from the definition of listed
property.
taxmap/pubs/p529-000.htm#en_us_publink100026902Standard mileage rate.(p1)
The 2010 rate for business use of a vehicle is 50 cents per mile.
taxmap/pubs/p529-000.htm#en_us_publink100026905Photographs of missing children.(p1)
The Internal Revenue Service is a proud partner with the National
Center for Missing and Exploited Children. Photographs of missing children
selected by the Center may appear in this publication on pages that would
otherwise be blank. You can help bring these children home by looking at the
photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a
child.
This publication explains which expenses you can claim as miscellaneous
itemized deductions on Schedule A (Form 1040 or Form 1040NR). You must reduce
the total of most miscellaneous itemized deductions by 2% of your adjusted gross
income. This publication covers the following topics.
- Deductions subject to the 2% limit.
- Deductions not subject to the 2% limit.
- Expenses you cannot deduct.
- How to report your deductions.
Some of the deductions previously discussed in this publication
are adjustments to income rather than miscellaneous deductions. These include
certain employee business expenses that must be listed on Form 2106 or Form
2106-EZ and some that are entered directly on Form 1040. Those deductions, which
are discussed in Publication 463, Travel, Entertainment, Gift, and Car Expenses,
include employee business expenses of officials paid on a fee basis and
performing artists.
Note.Generally, nonresident aliens are allowed miscellaneous itemized
deductions to the extent they are directly related to effectively connected
income.
 |
You must keep records to verify your deductions. You should keep receipts,
canceled checks, substitute checks, financial account statements, and other
documentary evidence. For more information on recordkeeping, see Publication
552, Recordkeeping for Individuals. |
taxmap/pubs/p529-000.htm#en_us_publink100026908We welcome your comments about this publication and your suggestions
for future editions.
You can write to us at the following address:
Internal Revenue Service
Individual Forms and Publications Branch
SE:W:CAR:MP:T:I
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would
be helpful if you would include your daytime phone number, including the area
code, in your correspondence.
You can email us at
*taxforms@irs.gov. (The asterisk must be included in the address.) Please put
"Publications Comment" on the subject line. Although we cannot respond
individually to each email, we do appreciate your feedback and will consider
your comments as we revise our tax products.
Visit
www.irs.gov/formspubs
to download forms and publications, call 1-800-829-3676, or write to the address
below and receive a response within 10 days after your request is received.
National Distribution Center
Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613If you have a tax question, check the information available on
IRS.gov
or call 1-800-829-1040. We cannot answer tax questions sent to either of the
addresses on this page.
Useful items
You may want to see:
Publication 463 Travel, Entertainment, Gift, and Car Expenses
525 Taxable and Nontaxable Income 535 Business Expenses 587 Business Use of Your Home (Including Use by Daycare Providers) 946 How To Depreciate Property Form (and Instructions) Schedule A (Form 1040):
Itemized Deductions 2106:
Employee Business Expenses
2106-EZ:
Unreimbursed Employee Business Expenses See
How To Get Tax Help
near the end of this publication for information about getting
these publications and forms.
taxmap/pubs/p529-000.htm#en_us_publink100026911You can deduct certain expenses as miscellaneous itemized deductions
on Schedule A (Form 1040 or Form 1040NR). You can claim the amount of expenses
that is more than 2% of your adjusted gross income. You figure your deduction on
Schedule A by subtracting 2% of your adjusted gross income from the total amount
of these expenses. Your adjusted gross income is the amount on Form 1040, line
38, or Form 1040NR, line 37.
Generally, you apply the 2% limit after you apply any other deduction
limit. For example, you apply the 50% (or 80%) limit on business-related meals
and entertainment (discussed later under
Travel, Transportation, Meals, Entertainment, Gifts, and Local
Lodging) before you apply the 2% limit.
Deductions subject to the 2% limit are discussed in the following
three categories.
- Unreimbursed employee expenses (Schedule A (Form 1040), line
21 or Schedule A (Form 1040NR), line 9).
- Tax preparation fees (Schedule A (Form 1040), line 22 or Schedule
A (Form 1040NR), line 10).
- Other expenses (Schedule A (Form 1040), line 23 or Schedule
A (Form 1040NR), line 11).
Generally, the following expenses are deducted on Schedule A
(Form 1040), line 21, or Schedule A (Form 1040NR), line 9.
You can deduct only unreimbursed employee expenses that are:
- Paid or incurred during your tax year,
- For carrying on your trade or business of being an employee,
and
- Ordinary and necessary.
An expense is ordinary if it is common and accepted in your
trade, business, or profession. An expense is necessary if it is appropriate and
helpful to your business. An expense does not have to be required to be
considered necessary.
You may be able to deduct the following items as unreimbursed
employee expenses.
- Business bad debt of an employee.
- Business liability insurance premiums.
- Damages paid to a former employer for breach of an employment
contract.
- Depreciation on a computer your employer requires you to use
in your work.
- Dues to a chamber of commerce if membership helps you do your
job.
- Dues to professional societies.
- Educator expenses.
- 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 carriers' vehicle expenses.
- Subscriptions to professional journals and trade magazines
related to your work.
- Tools and supplies used in your work.
- Travel, transportation, meals, entertainment, gifts, and local
lodging related to your work.
- Union dues and expenses.
- Work clothes and uniforms if required and not suitable for
everyday use.
- Work-related education.
A business bad debt is a loss from a debt created or acquired
in your trade or business. Any other worthless debt is a business bad debt only
if there is a very close relationship between the debt and your trade or
business when the debt becomes worthless.
A debt has a very close relationship to your trade or business
of being an employee if your main motive for incurring the debt is a business
reason.
taxmap/pubs/p529-000.htm#en_us_publink100026915You make a bona fide loan to the corporation you work for. It
fails to pay you back. You had to make the loan in order to keep your job. You
have a business bad debt as an employee.
taxmap/pubs/p529-000.htm#en_us_publink100026916For more information on business bad debts, see chapter 10 in
Publication 535. For information on nonbusiness bad debts, see chapter 4 in
Publication 550, Investment Income and Expenses.
taxmap/pubs/p529-000.htm#en_us_publink100026917You can deduct insurance premiums you paid for protection against
personal liability for wrongful acts on the job.
taxmap/pubs/p529-000.htm#en_us_publink100026918If you break an employment contract, you can deduct damages you
pay your former employer if the damages are attributable to the pay you received
from that employer.
taxmap/pubs/p529-000.htm#en_us_publink100026919You can claim a depreciation deduction for a computer that you
use in your work as an employee if its use is:
- For the convenience of your employer, and
- Required as a condition of your employment.
 | For tax years beginning after 2009, cellular telephones and
similar telecommunications equipment have been removed from the definition of
listed property.
|
taxmap/pubs/p529-000.htm#en_us_publink100026920This means that your use of the computer is for a substantial
business reason of your employer. You must consider all facts in making this
determination. Use of your computer during your regular working hours to carry
on your employer's business is generally for the convenience of your employer.
taxmap/pubs/p529-000.htm#en_us_publink100026921This means that you cannot properly perform your duties without
the computer. Whether you can properly perform your duties without it depends on
all the facts and circumstances. It is not necessary that your employer
explicitly requires you to use your computer. But neither is it enough that your
employer merely states that your use of the item is a condition of your
employment.
taxmap/pubs/p529-000.htm#en_us_publink100026922You are an engineer with an engineering firm. You occasionally
take work home at night rather than work late at the office. You own and use a
computer that is similar to the one you use at the office to complete your work
at home. Since your use of the computer is not for the convenience of your
employer and is not required as a condition of your employment, you cannot claim
a depreciation deduction for it.
taxmap/pubs/p529-000.htm#en_us_publink100026923The depreciation method you use depends on whether you meet the
more-than-50%-use test.
taxmap/pubs/p529-000.htm#en_us_publink100026924You meet this test if you use the computer more than 50% in your
work. If you meet this test, you can claim accelerated depreciation under the
General Depreciation System (GDS). In addition, you may be able to take the
section 179 deduction for the year you place the item in service.
taxmap/pubs/p529-000.htm#en_us_publink100026925If you do not meet the more-than-50%-use test, you are limited
to the straight line method of depreciation under the Alternative Depreciation
System (ADS). You also cannot claim the section 179 deduction. (But if you use
your computer in a home office, see the exception below.)
taxmap/pubs/p529-000.htm#en_us_publink100026926Your use of a computer in connection with investments (described
later under
Other Expenses) does not count as use in your work. However, you can combine
your investment use with your work use in figuring your depreciation deduction.
taxmap/pubs/p529-000.htm#en_us_publink100026927The more-than-50%-use test does not apply to a computer used
only in a part of your home that meets the requirements described later under
Home Office. You can claim accelerated depreciation using GDS for a computer
used in a qualifying home office, even if you do not use it more than 50% in
your work. You also may be able to take a section 179 deduction for the year you
place the computer in service. See
Computer used in a home office under
How To Report, later.
taxmap/pubs/p529-000.htm#en_us_publink100026928For more information on depreciation and the section 179 deduction
for computers and other items used in a home office, see
Business Furniture and Equipment
in Publication 587. Publication 946 has detailed information about the section
179 deduction and depreciation deductions using GDS and ADS.
taxmap/pubs/p529-000.htm#en_us_publink100026929 See
How To Report, later, for information about reporting a deduction for depreciation.
|
You must keep records to prove your percentage of business and investment use.
|
taxmap/pubs/p529-000.htm#en_us_publink100026931You may be able to deduct dues paid to professional organizations
(such as bar associations and medical associations) and to chambers of commerce
and similar organizations, if membership helps you carry out the duties of your
job. Similar organizations include:
- Boards of trade,
- Business leagues,
- Civic or public service organizations,
- Real estate boards, and
- Trade associations.
taxmap/pubs/p529-000.htm#en_us_publink100026932
You may not be able to deduct that part of your dues that is for certain
lobbying and political activities. See
Lobbying Expenses
under
Nondeductible Expenses,
later.
taxmap/pubs/p529-000.htm#en_us_publink1000245979If you were an eligible educator in 2010, you can deduct up to
$250 of qualified expenses you paid in 2010 as an adjustment to gross income on
Form 1040, line 23, rather than as a miscellaneous itemized deduction. If you
file Form 1040A, you can deduct these expenses on line 16. If you and your
spouse are filing jointly and both of you were eligible educators, the maximum
deduction is $500. However, neither spouse can deduct more than $250 of his or
her qualified expenses.
taxmap/pubs/p529-000.htm#en_us_publink1000254790An eligible educator is a kindergarten through grade 12 teacher,
instructor, counselor, principal, or aide in school for at least 900 hours
during a school year.
taxmap/pubs/p529-000.htm#en_us_publink1000254791Qualified expenses include ordinary and necessary expenses paid
in connection with books, supplies, equipment (including computer equipment,
software, and services), and other materials used in the classroom. An ordinary
expense is one that is common and accepted in your educational field. A
necessary expenses is one that is helpful and appropriate for your profession as
an educator. An expense does not have to be required to be considered necessary.
Qualified expenses do not include expenses for home schooling
or for nonathletic supplies for courses in health or physical education. You
must reduce your qualified expenses by the following amounts.
- Excludable U.S. series EE and I savings bond interest from
Form 8815.
- Nontaxable qualified state tuition program earnings.
- Nontaxable earnings from Coverdell education savings accounts.
- Any reimbursements you received for those expenses that
were not reported to you on your Form W-2, box 1.
taxmap/pubs/p529-000.htm#en_us_publink1000254797If you were an educator in 2010 and you had qualified expenses
that you cannot take as an adjustment to gross income, you can deduct the rest
as an itemized deduction subject to the 2% limit.
taxmap/pubs/p529-000.htm#en_us_publink100026933If you use a part of your home regularly and exclusively for
business purposes, you may be able to deduct a part of the operating expenses
and depreciation of your home.
You can claim this deduction for the business use of a part of
your home only if you use that part of your home regularly and exclusively:
- As your principal place of business for any trade or business,
- As a place to meet or deal with your patients, clients, or
customers in the normal course of your trade or business, or
- In the case of a separate structure not attached to your home,
in connection with your trade or business.
The regular and exclusive business use must be for the convenience
of your employer and not just appropriate and helpful in your job.
taxmap/pubs/p529-000.htm#en_us_publink100026934If you have more than one place of business, the business part
of your home is your principal place of business if:
- You use it regularly and exclusively for administrative or
management activities of your trade or business, and
- You have no other fixed location where you conduct substantial
administrative or management activities of your trade or business.
Otherwise, the location of your principal place of business generally
depends on the relative importance of the activities performed at each location
and the time spent at each location.
|
You should keep records that will give the information needed to figure the
deduction according to these rules. Also keep canceled checks, substitute
checks, or account statements and receipts of the expenses paid to prove the
deductions you claim. |
taxmap/pubs/p529-000.htm#en_us_publink100026936See Publication 587 for more detailed information and a worksheet
for figuring the deduction.
taxmap/pubs/p529-000.htm#en_us_publink100026937You can deduct certain expenses you have in looking for a new
job in your present occupation, even if you do not get a new job. You cannot
deduct these expenses if:
- You are looking for a job in a new occupation,
- There was a substantial break between the ending of your last
job and your looking for a new one, or
- You are looking for a job for the first time.
You can deduct employment and outplacement agency fees you pay in looking for a
new job in your present occupation.
taxmap/pubs/p529-000.htm#en_us_publink100026939If, in a later year, your employer pays you back for employment
agency fees, you must include the amount you receive in your gross income up to
the amount of your tax benefit in the earlier year. See
Recoveries
in Publication 525.
taxmap/pubs/p529-000.htm#en_us_publink100026940If your employer pays the fees directly to the employment agency
and you are not responsible for them, you do not include them in your gross
income.
taxmap/pubs/p529-000.htm#en_us_publink100026941You can deduct amounts you spend for preparing and mailing copies
of a résumé to prospective employers if you are looking for a new job
in your present occupation.
taxmap/pubs/p529-000.htm#en_us_publink100026942If you travel to an area and, while there, you look for a new
job in your present occupation, you may be able to deduct travel expenses to and
from the area. You can deduct the travel expenses if the trip is primarily to
look for a new job. The amount of time you spend on personal activity compared
to the amount of time you spend in looking for work is important in determining
whether the trip is primarily personal or is primarily to look for a new job.
Even if you cannot deduct the travel expenses to and from an
area, you can deduct the expenses of looking for a new job in your present
occupation while in the area.
You can choose to use the standard mileage rate to figure your car expenses. The
2010 rate for business use of a vehicle is 50 cents per mile. See Publication
463 for more information on travel and car expenses.
taxmap/pubs/p529-000.htm#en_us_publink100026943You can deduct legal fees related to doing or keeping your job.
taxmap/pubs/p529-000.htm#en_us_publink100026944You can deduct the amount you pay each year to state or local
governments for licenses and regulatory fees for your trade, business, or
profession.
taxmap/pubs/p529-000.htm#en_us_publink100026945You can deduct an occupational tax charged at a flat rate by
a locality for the privilege of working or conducting a business in the
locality. If you are an employee, you can claim occupational taxes only as a
miscellaneous deduction subject to the 2% limit; you cannot claim them as a
deduction for taxes elsewhere on your return.
taxmap/pubs/p529-000.htm#en_us_publink100026946An "income aid payment" is one that is received under an employer's
plan to aid employees who lose their jobs because of lack of work. If you repay
a lump-sum income aid payment that you received and included in income in an
earlier year, you can deduct the repayment.
taxmap/pubs/p529-000.htm#en_us_publink100026947If you are a college professor, you can deduct your research
expenses, including travel expenses, for teaching, lecturing, or writing and
publishing on subjects that relate directly to your teaching duties. You must
have undertaken the research as a means of carrying out the duties expected of a
professor and without expectation of profit apart from salary. However, you
cannot deduct the cost of travel as a form of education.
taxmap/pubs/p529-000.htm#en_us_publink100026948If your expenses to use a vehicle in performing services as a
rural mail carrier are more than the amount of your reimbursements, you can
deduct the unreimbursed expenses. See chapter 4 of Publication 463 for more
information.
taxmap/pubs/p529-000.htm#en_us_publink100026949Generally, you can deduct amounts you spend for tools used in
your work if the tools wear out and are thrown away within 1 year from the date
of purchase. You can depreciate the cost of tools that have a useful life
substantially beyond the tax year. For more information about depreciation, see
Publication 946.
taxmap/pubs/p529-000.htm#en_us_publink100026950If you are an employee and have ordinary and necessary business-related
expenses for travel away from home, local transportation, entertainment, and
gifts, you may be able to deduct these expenses. Generally, you must file Form
2106 or Form 2106-EZ to claim these expenses.
taxmap/pubs/p529-000.htm#en_us_publink100026951Travel expenses are those incurred while traveling away from
home for your employer. You can deduct travel expenses paid or incurred in
connection with a temporary work assignment. Generally, you cannot deduct travel
expenses paid or incurred in connection with an indefinite work assignment.
Travel expenses may include:
- The cost of getting to and from your business destination
(air, rail, bus, car, etc.),
- Meals and lodging while away from home,
- Taxi fares,
- Baggage charges, and
- Cleaning and laundry expenses.
Travel expenses are discussed more fully in chapter 1 of Publication
463.
taxmap/pubs/p529-000.htm#en_us_publink100026952
If your assignment or job away from home in a single location is realistically
expected to last (and does in fact last) for 1 year or less, it is temporary,
unless there are facts and circumstances that indicate it is not.
taxmap/pubs/p529-000.htm#en_us_publink100026953If your assignment or job away from home in a single location
is realistically expected to last for more than 1 year, it is indefinite,
whether or not it actually lasts for more than 1 year.
If your assignment or job away from home in a single location
is realistically expected to last for 1 year or less, but at some later date it
is realistically expected to exceed 1 year, it will be treated as temporary (in
the absence of facts and circumstances indicating otherwise) until the date that
your realistic expectation changes, and it will be treated as indefinite after
that date.
taxmap/pubs/p529-000.htm#en_us_publink100026954If you are a federal employee participating in a federal crime
investigation or prosecution, you are not subject to the 1-year rule for
deducting temporary travel expenses. This means that you may be able to deduct
travel expenses even if you are away from your tax home for more than 1 year.
To qualify, the Attorney General must certify that you are traveling:
- For the Federal Government,
- In a temporary duty status, and
- To investigate, prosecute, or provide support services for
the investigation or prosecution of a federal crime.
If you are a member of a reserve component of the Armed Forces
of the United States and you travel more than 100 miles away from home in
connection with your performance of services as a member of the reserves, you
can deduct some of your travel expenses as an adjustment to gross income rather
than as a miscellaneous itemized deduction. The amount of expenses you can
deduct as an adjustment to gross income is limited to the regular federal per
diem rate (for lodging, meals, and incidental expenses) and the standard mileage
rate (for car expenses) plus any parking fees, ferry fees, and tolls. The
balance, if any, is reported on Schedule A.
You are a member of a reserve component of the Armed Forces of
the United States if you are in the Army, Naval, Marine Corps, Air Force, or
Coast Guard Reserve, the Army National Guard of the United States, the Air
National Guard of the United States, or the Reserve Corps of the Public Health
Service.
For more information on travel expenses, see Publication 463.
taxmap/pubs/p529-000.htm#en_us_publink100026956Local transportation expenses are the expenses of getting from
one workplace to another when you are not traveling away from home. They include
the cost of transportation by air, rail, bus, taxi, and the cost of using your
car.
You can choose to use the standard mileage rate to figure your
car expenses. The 2010 rate for business use of a vehicle is 50 cents per mile.
 | In general, the costs of commuting between your residence
and your place of business are nondeductible. |
taxmap/pubs/p529-000.htm#en_us_publink100026957If you work at two places in a day, whether or not for the same
employer, you can generally deduct the expenses of getting from one workplace to
the other.
taxmap/pubs/p529-000.htm#en_us_publink100026958You can deduct expenses incurred in going between your home and
a temporary work location if at least one of the following applies.
- The work location is outside the metropolitan area where you
live and normally work.
- You have at least one regular work location (other than your
home) for the same trade or business. (If this applies, the distance between
your home and the temporary work location does not matter.)
For this purpose, a work location is generally considered temporary
if your work there is realistically expected to last (and does in fact last) for
1 year or less. It is not temporary if your work there is realistically expected
to last for more than 1 year, even if it actually lasts for 1 year or less. If
your work there initially is realistically expected to last for 1 year or less,
but later is realistically expected to last for more than 1 year, the work
location is generally considered temporary until the date your realistic
expectation changes and not temporary after that date. For more information, see
chapter 1 of Publication 463.
taxmap/pubs/p529-000.htm#en_us_publink100026959You can deduct expenses incurred in going between your home and
a workplace if your home is your principal place of business for the same trade
or business. (In this situation, whether the other workplace is temporary or
regular and its distance from your home do not matter.) See
Home Office, earlier, for a discussion on the use of your home as your
principal place of business.
taxmap/pubs/p529-000.htm#en_us_publink100026960Generally, you can deduct entertainment expenses (including entertainment-related
meals) only if they are directly related to the active conduct of your trade or
business. However, the expense only needs to be associated with the active
conduct of your trade or business if it directly precedes or follows a
substantial and bona fide business-related discussion.
You can deduct only 50% of your business-related meal and entertainment
expenses unless the expenses meet certain exceptions. You apply this 50% limit
before you apply the 2%-of-adjusted-gross-income limit.
taxmap/pubs/p529-000.htm#en_us_publink100026961You can deduct 80% of your business-related meal expenses if
you consume the meals during or incident to any period subject to the Department
of Transportation's "hours of service" limits. You apply this 80% limit before
you apply the 2%-of-adjusted-gross-income limit.
taxmap/pubs/p529-000.htm#en_us_publink100026962You can generally deduct up to $25 of business gifts you give
to any one individual during the year. The following items do not count toward
the $25 limit.
- Identical, widely distributed items costing $4 or less that
have your name clearly and permanently imprinted.
- Signs, racks, and promotional materials to be displayed on
the business premises of the recipient.
If your employer provides or requires you to obtain lodging while
you are not traveling away from home, you can deduct the cost of the lodging if
it is on a temporary basis, it is necessary for you to participate in or be
available for a business meeting or employer function, and the costs are
ordinary and necessary, but not lavish or extravagant.
If your employer provides the lodging or reimburses you for the
cost of the lodging, you can deduct the cost only if the value or the
reimbursement is included in your gross income because it is reported as wages
on your Form W-2.
taxmap/pubs/p529-000.htm#en_us_publink100026964
See Publication 463 for more information on travel, transportation, meal,
entertainment, and gift expenses, and reimbursements for these expenses.
taxmap/pubs/p529-000.htm#en_us_publink100026965You can deduct dues and initiation fees you pay for union membership.
You can also deduct assessments for benefit payments to unemployed
union members. However, you cannot deduct the part of the assessments or
contributions that provides funds for the payment of sick, accident, or death
benefits. Also, you cannot deduct contributions to a pension fund even if the
union requires you to make the contributions.
You may not be able to deduct amounts you pay to the union that
are related to certain lobbying and political activities. See
Lobbying Expenses
under
Nondeductible Expenses,
later.
taxmap/pubs/p529-000.htm#en_us_publink100026966You can deduct the cost and upkeep of work clothes if the following
two requirements are met.
- You must wear them as a condition of your employment.
- The clothes are not suitable for everyday wear.
| It is not enough that you wear distinctive clothing. The
clothing must be specifically required by your employer. Nor is it enough that
you do not, in fact, wear your work clothes away from work. The clothing must
not be suitable for taking the place of your regular clothing. |
Examples of workers who may be able to deduct the cost and upkeep
of work clothes are: delivery workers, firefighters, health care workers, law
enforcement officers, letter carriers, professional athletes, and transportation
workers (air, rail, bus, etc.).
Musicians and entertainers can deduct the cost of theatrical
clothing and accessories that are not suitable for everyday wear.
However, work clothing consisting of white cap, white shirt or
white jacket, white bib overalls, and standard work shoes, which a painter is
required by his union to wear on the job, is not distinctive in character or in
the nature of a uniform. Similarly, the costs of buying and maintaining blue
work clothes worn by a welder at the request of a foreman are not deductible.
taxmap/pubs/p529-000.htm#en_us_publink100026968You can deduct the cost of protective clothing required in your
work, such as safety shoes or boots, safety glasses, hard hats, and work gloves.
Examples of workers who may be required to wear safety items
are: carpenters, cement workers, chemical workers, electricians, fishing boat
crew members, machinists, oil field workers, pipe fitters, steamfitters, and
truck drivers.
taxmap/pubs/p529-000.htm#en_us_publink100026969You generally cannot deduct the cost of your uniforms if you
are on full-time active duty in the armed forces. However, if you are an armed
forces reservist, you can deduct the unreimbursed cost of your uniform if
military regulations restrict you from wearing it except while on duty as a
reservist. In figuring the deduction, you must reduce the cost by any nontaxable
allowance you receive for these expenses.
If local military rules do not allow you to wear fatigue uniforms
when you are off duty, you can deduct the amount by which the cost of buying and
keeping up these uniforms is more than the uniform allowance you receive.
If you are a student at an armed forces academy, you cannot deduct
the cost of your uniforms if they replace regular clothing. However, you can
deduct the cost of insignia, shoulder boards, and related items.
You can deduct the cost of your uniforms if you are a civilian faculty or staff
member of a military school.
taxmap/pubs/p529-000.htm#en_us_publink100026970You can deduct expenses you have for education, even if the education
may lead to a degree, if the education meets at least one of the following two
tests.
- It maintains or improves skills required in your present work.
- It is required by your employer or the law to keep your salary,
status, or job, and the requirement serves a business purpose of your employer.
You cannot deduct expenses you have for education, even though
one or both of the preceding tests are met, if the education:
- Is needed to meet the minimum educational requirements to
qualify you in your trade or business, or
- Is part of a program of study that will lead to qualifying
you in a new trade or business.
If your education qualifies, you can deduct expenses for tuition,
books, supplies, laboratory fees, and similar items, and certain transportation
costs.
If the education qualifies you for a new trade or business, you
cannot deduct the educational expenses even if you do not intend to enter that
trade or business.
taxmap/pubs/p529-000.htm#en_us_publink100026971You cannot deduct the cost of travel that in itself constitutes
a form of education. For example, a French teacher who travels to France to
maintain general familiarity with the French language and culture cannot deduct
the cost of the trip as an educational expense.
taxmap/pubs/p529-000.htm#en_us_publink100026972
See chapter 12 of Publication 970, Tax Benefits for Education, for a complete
discussion of the deduction for work-related education expenses.
taxmap/pubs/p529-000.htm#en_us_publink100026973You can usually deduct tax preparation fees on the return for
the year in which you pay them. Thus, on your 2010 return, you can deduct fees
paid in 2010 for preparing your 2009 return. These fees include the cost of tax
preparation software programs and tax publications. They also include any fee
you paid for electronic filing of your return. See
Tax preparation fees under
How To Report, later.
taxmap/pubs/p529-000.htm#en_us_publink100026974You can deduct certain other expenses as miscellaneous itemized
deductions subject to the 2%-of-adjusted-gross-
income limit. On Schedule A (Form 1040), line 23, or Schedule
A (Form 1040NR), line 11, you can deduct expenses that you pay:
- To produce or collect income that must be included in your
gross income,
- To manage, conserve, or maintain property held for producing
such income, or
- To determine, contest, pay, or claim a refund of any tax.
You can deduct expenses you pay for the purposes in (1) and
(2) above only if they are reasonable and closely related to these purposes.
These other expenses include the following items.
- Appraisal fees for a casualty loss or charitable contribution.
- Casualty and theft losses from property used in performing
services as an employee.
- Clerical help and office rent in caring for investments.
- Depreciation on home computers used for investments.
- Excess deductions (including administrative expenses) allowed
a beneficiary on termination of an estate or trust.
- Fees to collect interest and dividends.
- Hobby expenses, but generally not more than hobby income.
- Indirect miscellaneous deductions from pass-through entities.
- Investment fees and expenses.
- Legal fees related to producing or collecting taxable income
or getting tax advice.
- Loss on deposits in an insolvent or bankrupt financial institution.
- Loss on traditional IRAs or Roth IRAs, when all amounts have
been distributed to you.
- 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, if separately billed and paid.
If the expenses you pay produce income that is only partially
taxable, see
Tax-Exempt Income Expenses, later, under
Nondeductible Expenses.You can deduct appraisal fees if you pay them to figure a casualty
loss or the fair market value of donated property.
taxmap/pubs/p529-000.htm#en_us_publink100026976You can deduct a casualty or theft loss as a miscellaneous itemized
deduction subject to the 2% limit if you used the damaged or stolen property in
performing services as an employee. First report the loss in Section B of Form
4684, Casualties and Thefts. You may also have to include the loss on Form 4797,
Sales of Business Property, if you are otherwise required to file that form. To
figure your deduction, add all casualty or theft losses from this type of
property included on Form 4684, lines 35 and 41b, or Form 4797, line 18a. For
more information on casualty and theft losses, see Publication 547, Casualties,
Disasters, and Thefts.
taxmap/pubs/p529-000.htm#en_us_publink100026977You can deduct office expenses, such as rent and clerical help,
that you have in connection with your investments and collecting the taxable
income on them.
taxmap/pubs/p529-000.htm#en_us_publink1000234676You can deduct the convenience fee charged by the card processor
for paying your income tax (including estimated tax payments) by credit or debit
card. The fees are deductible on the return for the year in which you paid them.
For example, fees charged to payments made in 2010 can be claimed on the 2010
tax return.
taxmap/pubs/p529-000.htm#en_us_publink100026978You can deduct depreciation on your home computer if you use
it to produce income (for example, to manage your investments that produce
taxable income). You generally must depreciate the computer using the straight
line method over the Alternative Depreciation System (ADS) recovery period. But
if you work as an employee and also use the computer in that work, see
Depreciation on Computers under
Unreimbursed Employee Expenses, earlier. For more information on depreciation, see Publication
946.
taxmap/pubs/p529-000.htm#en_us_publink100026979If an estate's total deductions in its last tax year are more
than its gross income for that year, the beneficiaries succeeding to the
estate's property can deduct the excess. Do not include deductions for the
estate's personal exemption and charitable contributions when figuring the
estate's total deductions. The beneficiaries can claim the deduction only for
the tax year in which, or with which, the estate terminates, whether the year of
termination is a normal year or a short tax year. For more information, see
Termination of Estate
in Publication 559, Survivors, Executors, and Administrators.
taxmap/pubs/p529-000.htm#en_us_publink100026980You can deduct fees you pay to a broker, bank, trustee, or similar
agent to collect your taxable bond interest or dividends on shares of stock. But
you cannot deduct a fee you pay to a broker to buy investment property, such as
stocks or bonds. You must add the fee to the cost of the property.
You cannot deduct the fee you pay to a broker to sell securities.
You can use the fee only to figure gain or loss from the sale. See the
instructions for columns (d) and (e) of Schedule D (Form 1040) for information
on how to report the fee.
taxmap/pubs/p529-000.htm#en_us_publink100026981You can generally deduct hobby expenses, but only up to the amount
of hobby income. A hobby is not a business because it is not carried on to make
a profit. See
Not-for-Profit Activities
in chapter 1 of Publication 535.
taxmap/pubs/p529-000.htm#en_us_publink100026982Pass-through entities include partnerships, S corporations, and
mutual funds that are not publicly offered. Deductions of pass-through entities
are passed through to the partners or shareholders. The partners or shareholders
can deduct their share of passed-through deductions for investment expenses as
miscellaneous itemized deductions subject to the 2% limit.
taxmap/pubs/p529-000.htm#en_us_publink100026983You are a member of an investment club that is formed solely
to invest in securities. The club is treated as a partnership. The partnership's
income is solely from taxable dividends, interest, and gains from sales of
securities. In this case, you can deduct your share of the partnership's
operating expenses as miscellaneous itemized deductions subject to the 2% limit.
However, if the investment club partnership has investments that also produce
nontaxable income, you cannot deduct your share of the partnership's expenses
that produce the nontaxable income.
taxmap/pubs/p529-000.htm#en_us_publink100026984Publicly offered mutual funds do not pass deductions for investment
expenses through to shareholders. A mutual fund is "publicly offered" if it is:
- Continuously offered pursuant to a public offering,
- Regularly traded on an established securities market, or
- Held by or for at least 500 persons at all times during the
tax year.
A publicly offered mutual fund will send you a Form 1099-DIV,
Dividends and Distributions, or a substitute form, showing the net amount of
dividend income (gross dividends minus investment expenses). This net figure is
the amount you report on your return as income. You cannot deduct investment
expenses.
taxmap/pubs/p529-000.htm#en_us_publink100026985You should receive information returns from pass-through entities.
taxmap/pubs/p529-000.htm#en_us_publink100026986These entities issue Schedule K-1, which lists the items and
amounts you must report, and identifies the tax return schedules and lines to
use.
taxmap/pubs/p529-000.htm#en_us_publink100026987These funds will send you a Form 1099-DIV, or a substitute form,
showing your share of gross income and investment expenses. You can claim the
expenses only as a miscellaneous itemized deduction subject to the 2% limit.
taxmap/pubs/p529-000.htm#en_us_publink100026988You can deduct investment fees, custodial fees, trust administration
fees, and other expenses you paid for managing your investments that produce
taxable income.
taxmap/pubs/p529-000.htm#en_us_publink100026989You can usually deduct legal expenses that you incur in attempting
to produce or collect taxable income or that you pay in connection with the
determination, collection, or refund of any tax.
You can also deduct legal expenses that are:
- Related to either doing or keeping your job, such as those
you paid to defend yourself against criminal charges arising out of your trade
or business,
- For tax advice related to a divorce if the bill specifies
how much is for tax advice and it is determined in a reasonable way, or
- To collect taxable alimony.
You can deduct expenses of resolving tax issues relating to profit
or loss from business (Schedule C or C-EZ), rentals or royalties (Schedule E),
or farm income and expenses (Schedule F) on the appropriate schedule. You deduct
expenses of resolving nonbusiness tax issues on Schedule A (Form 1040 or Form
1040NR). See
Tax Preparation Fees,
earlier.
taxmap/pubs/p529-000.htm#en_us_publink100026990You may be able to deduct, as an adjustment to income on Form
1040, line 36, or Form 1040NR, line 35, rather than as a miscellaneous itemized
deduction, attorney fees and court costs for actions settled or decided after
October 22, 2004, involving a claim of unlawful discrimination, a claim against
the U.S. Government, or a claim made under section 1862(b)(3)(A) of the Social
Security Act. However, the amount you can deduct on Form 1040, line 36, or Form
1040NR, line 35, is limited to the amount of the judgment or settlement you are
including in income for the tax year. See Publication 525 for more information.
taxmap/pubs/p529-000.htm#en_us_publink100026991If you can reasonably estimate the amount of your loss on money
you have on deposit in a financial institution that becomes insolvent or
bankrupt, you can generally choose to deduct it in the current year even though
its exact amount has not been finally determined. Once you make this choice, you
cannot change it without IRS approval.
If none of the deposit is federally insured, you can deduct the
loss in either of the following ways.
- As a miscellaneous itemized deduction subject to the 2% limit.
Write the name of the financial institution and "Insolvent Financial
Institution" beside the amount on Schedule A (Form 1040), line 23, or Schedule A
(Form 1040NR), line 11. This deduction is limited to $20,000 ($10,000 if you are
married filing separately) for each financial institution, reduced by any
expected state insurance proceeds.
- As a casualty loss. See Publication 547 for details.
If any part of the deposit is federally insured, you can deduct
the loss only as a casualty loss.
taxmap/pubs/p529-000.htm#en_us_publink100026992You cannot make this choice if you are a 1%-or-more-owner or
an officer of the financial institution, or are related to such owner or
officer. For a definition of "related," see
Deposit in Insolvent or Bankrupt Financial Institution
in chapter 4 of Publication 550.
taxmap/pubs/p529-000.htm#en_us_publink100026993If you make this choice and your actual loss is less than your
estimated loss, you must include the excess in income. See
Recoveries
in Publication 525. If your actual loss is more than your estimated
loss, treat the excess loss as explained under
Choice not made,
next.
taxmap/pubs/p529-000.htm#en_us_publink100026994If you do not make this choice (or if you have an excess actual
loss after choosing to deduct your estimated loss), treat your loss (or excess
loss) as a nonbusiness bad debt (deductible as a short-term capital loss) in the
year its amount is finally determined. See
Nonbusiness Bad Debts
in chapter 4 of Publication 550.
taxmap/pubs/p529-000.htm#en_us_publink100026995
If you have a loss on your traditional IRA (or Roth IRA) investment, you can
deduct the loss as a miscellaneous itemized deduction subject to the 2% limit,
but only when all the amounts in all your traditional IRA (or Roth IRA) accounts
have been distributed to you and the total distributions are less than your
unrecovered basis. For more information, see Publication 590, Individual
Retirement Arrangements (IRAs).
taxmap/pubs/p529-000.htm#en_us_publink100026996If you had to repay an amount that you included in income in
an earlier year, you may be able to deduct the amount you repaid. If the amount
you had to repay was ordinary income of $3,000 or less, the deduction is subject
to the 2% limit. If it was more than $3,000, see
Repayments Under Claim of Right
under
Deductions Not Subject to the 2% Limit,
later.
taxmap/pubs/p529-000.htm#en_us_publink100026997If the total of the amounts in box 5 (net benefits for 2010)
of all your Forms SSA-1099, Social Security Benefit Statement, and Forms
RRB-1099, Payments By the Railroad Retirement Board, is a negative figure (a
figure in parentheses), you may be able to take a miscellaneous itemized
deduction subject to the 2% limit. The amount you can deduct is the part of the
negative figure that represents an amount you included in gross income in an
earlier year.
The amount in box 5 of Form SSA-1099 or RRB-1099 is the net amount
of your benefits for the year. It will be a negative figure if the amount of
benefits you repaid in 2010 (box 4) is more than the gross amount of benefits
paid to you in 2010 (box 3).
| If the deduction is more than $3,000, you will have to use
a special computation to figure your tax. See Publication 915, Social Security
and Equivalent Railroad Retirement Benefits, for additional information.
|
taxmap/pubs/p529-000.htm#en_us_publink100026999You can deduct safe deposit box rent if you use the box to store
taxable income-producing stocks, bonds, or investment-related papers and
documents. You cannot deduct the rent if you use the box only for jewelry, other
personal items, or tax-exempt securities.
taxmap/pubs/p529-000.htm#en_us_publink100027000You can deduct service charges you pay as a subscriber in a dividend
reinvestment plan. These service charges include payments for:
- Holding shares acquired through a plan,
- Collecting and reinvesting cash dividends, and
- Keeping individual records and providing detailed statements
of accounts.
Trustee's administrative fees that are billed separately and
paid by you in connection with your IRA are deductible (if they are ordinary and
necessary) as a miscellaneous itemized deduction subject to the 2% limit.
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