Keep Track of Your Miscellaneous Deductions

Miscellaneous deductions can reduce your tax liability. These may include certain expenses you incurred at your job if you are an employee. You must itemize deductions when you file to claim these costs. So if you usually claim the standard deduction, consider itemizing instead. You might pay less tax if you itemize. Here are some IRS tax tips you should know that may help you reduce your tax liability:

Deductions Subject to the 2 Percent Limit — Most miscellaneous costs are deductible only if their sum is more than 2 percent of your adjusted gross income. These include expenses such as:

  • Unreimbursed employee expenses
  • Job search costs for a new job in the same line of work
  • Some work clothes and uniforms, if required and not suitable for everyday use
  • Tools and supplies used for your job
  • Union dues and expenses
  • Work-related travel and transportation
  • The cost you paid to prepare your tax return. These fees include the cost you paid for tax preparation software. They also include any fee you paid for e-filing your return.

Deductions Not Subject to the 2 Percent Limit — Some deductions are not subject to the 2 percent limit. They include:

  • Certain casualty and theft losses. In most cases, this rule applies to damaged or stolen property you held for investment. This may include property, such as stocks, bonds and works of art.
  • Gambling losses up to the total of your gambling winnings.
  • Losses from Ponzi-type investment schemes.

There are many expenses that you can’t deduct. For example, you can’t deduct personal living or family expenses. You can claim allowable miscellaneous deductions on Schedule A (Form 1040), Itemized Deductions. For more about this topic, see Publication 529, Miscellaneous Deductions. You can view and download the publication on IRS.gov/forms at any time.

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