Miscellaneous Expenses

If you have expenses that qualify as miscellaneous itemized deductions, you can deduct the total amount of those expenses only to the extent that they exceed 2% of your adjusted gross income.

There are three types of expenses that are subject to the 2% limit. They are unreimbursed employee expenses, tax preparation fees and other expenses. For an explanation of deductible and nondeductible expenses refer to Publication 529, Miscellaneous Deductions.

Certain unreimbursed employee expenses are deductible as miscellaneous itemized deductions on Form 1040, Schedule A. 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% limit 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

For additional information, refer to the Form 1040, Schedule A Instructions, and Publication 529, Miscellaneous Deductions, or Publication 946, How To Depreciate Property. If you want more in-depth information about educational expenses, refer to Tax Topic 513. For further information on employee business expenses, refer to Tax Topic 511, and Tax Topic 512.