Miscellaneous Deductions: Fully Deductible Or Not?

Miscellaneous deductions are those deductible items which are not medical expenses, taxes, interest, charitable contributions, or casualty losses. Miscellaneous deductions fall into two groups.  Some are fully deductible and some are deductible only to the extent that they exceed more than 2% of a tax-payer’s Adjusted Gross Income (AGI).

Fully deductible

  • Estate taxes which have already been imposed on the same taxable income.
  • Employment-related moving expenses.
  • Job-related expenses of handicapped persons such as personal aides, etc.
  • Gambling losses, but only up to the amount of winnings.
  • Money previously included in income, but which you have since repaid.

Subject to the 2% floor

  • IRA or Keogh custodian fees.
  • The cost of a safe-deposit box.
  • Investment expenses.
  • Tax preparation costs.
  • Employee business expenses such as 50% of meals and entertainment, travel, supplies, business books and magazines, and home-office deductions.
  • Depreciation on automobiles, tools, and other equipment purchased for business use.
  • Education expenses that are job-related.
  • Hobby expenses up to the amount of income derived from the activity.
  • Professional or union membership dues.