WASHINGTON – The IRS last week released some tips on how to make the most of miscellaneous deductions, which might not generally fit into a particular tax category.
The federal agency says these miscellaneous deductions could help reduce taxable income and the amount of taxes owed.
The federal agency provided the following tips:
The Two Percent Limit.
“Most miscellaneous costs are deductible only if the sum exceeds 2 percent of the taxpayer’s adjusted gross income (AGI). For example, before being able to deduct certain expenses, a taxpayer with $50,000 in AGI must come up with more than $1,000 in miscellaneous deductions.”
Expenses may include:
- Unreimbursed employee expenses
- Job-search costs for a new job in the same line of work
- Job tools
- Union dues
- Work-related travel and transportation
- The cost paid to prepare a tax return. These fees include the cost paid for tax-preparation software. They also include any fee paid for e-filing a return.
Deductions Not Subject to the Limit.
Some deductions are not subject to the 2 percent limit, including:
- Certain casualty and theft losses. In most cases, this rule is for damaged or stolen property held for investment. This may include property such as stocks, bonds and works of art.
- Gambling losses up to the total of gambling winnings
- Losses from Ponzi-type investment schemes
To claim allowable miscellaneous deductions, taxpayers must use Schedule A, Itemized Deductions, which can be found HERE.
More information can be found HERE.
