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Individual Income Tax Guide

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Introduction

You can deduct certain job expenses and other miscellaneous expenses, which are commonly called miscellaneous itemized dedcutions. However, you can only deduct the amount of these expenses in excess of 2% of your adjusted gross income from Form 1040, line 38 (i.e., the deductions are subject to a 2% floor). The vast majority of your personal expenses are nondedutible and only a small number of specific expenses can be deducted as miscellaneous itemized deductions.

NOTE: Another even smaller group of expenses are deductible as miscellaneous itemized deductions not subject to the 2% floor on line 28 of Schedule A. See here for details.

Examples of Expenses You Cannot Deduct

This is a list of expenses that taxpayers often think are deductible as miscellaneous itemized deductions which are not deductible:

This not an exclusive list of expenses that cannot be deducted. If a deduction for an expense is not specifically allowed, that expense cannot be deducted!

Schedule A, Line 21 – Unreimbursed Employee Expenses: Enter the total ordinary and necessary job expenses you paid that your employer did not reimburse you for. Note that amounts paid to you that your employer included in box 1 of your Form W-2 are not considered reimbursements.

An ordinary expense is one that is common and accepted in your field of trade, business, or profession. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be required to be considered necessary.

You must complete Form 2106, Employee Business Expenses, and attach it to your return if:

  1. You claim a deduction for any travel, transportation, meal, or entertainment expenses for your job.
  2. Your employer reimbursed you for any of your job expenses that you would otherwise report on line 21.

If you used your own vehicle for your job, are calculating your vehicle expenses using the standard mileage rate, and (2), does not apply, you may be able to file Form 2106-EZ, Unreimbursed Employee Business Expenses, instead.

If you are not required to file Form 2106 or 2106-EZ, you must list the type and amount of each expense for which you are claiming a deduction the dotted line next to line 21. If you need more space, attach a statement to your paper return listing the type and amount of each expense. Enter the total of all these listed expenses on line 21.

Examples of other expenses to include on line 21 are:

Schedule A, Line 22 – Tax Preparation Fees: You may deduct fees you paid to have your tax return prepared by a return preparer, including any electronic filing fees which you paid. If you paid your tax by credit or debit card, and you were charged a convenience fee, that fee should be included on line 23 instead of this line.

Schedule A, Line 23 – Other Expenses: Enter on this line the total amount you paid to produce or collect taxable income and manage or protect property you held for earning income. However, you cannot include any expenses that are considered personal expenses on this line.

You must list the type and amount of each expense for which you are claiming a deduction on the dotted lines next to Line 23 if you are filing a paper return. If you need more space, you should attach a statement to your paper return that lists the type and amount of each expense for which you are claiming a deduction. Enter the total of your listed expenses on Line 23.

Examples of expenses to include on line 23 are:

Chapter 14 - Schedule A: Miscellaneous Deductions

Examples of Expenses You Cannot Deduct

Schedule A, Line 21 – Unreimbursed Employee Expenses

Schedule A, Line 22 – Tax Preparation Fees

Schedule A, Line 23 – Other Expenses