Don’t
Miss Out On These Miscellaneous Deductions
The
term miscellaneous itemized deductions shouldn’t lull you into thinking that
this category is simply a catchall for obscure deductions. Miscellaneous
itemized deductions fall into one of three broad categories -- unreimbursed
employee business expenses, expenses related to your investments, and
tax-related expenses -- but cover everything from safe deposit box rentals to
work uniforms to tax preparation software. Here are some answers to some
frequently asked questions regarding miscellaneous itemized deductions.
How
Do I Claim Miscellaneous Itemized Deductions?
You may write off
miscellaneous itemized deductions only if you itemize. Generally, you may claim
that portion of your miscellaneous itemized deductions that exceeds 2 percent of
your adjusted gross income (AGI). For example, if your 1999 AGI is $80,000, you
may deduct only those miscellaneous itemized deductions that exceed $1,600
($80,000 x 2 percent). You figure your deduction on Schedule A by subtracting 2
percent of your AGI from the total amount of your miscellaneous itemized
deductions.
Can I Deduct The Cost Of Education Related To My Job?
You can
deduct expenses if the education is (1) required by your
employer, or the law, to keep your salary, status or job; or (2) maintains or
improves skills required in your present work. If your education meets these
requirements, you can deduct expenses for tuition, books, supplies, laboratory
fees, and similar items. You are not permitted to deduct expenses that enable
you to meet the minimum education requirements of your profession, nor can you
deduct education expenses that qualify you for a new line of work.
As
A Firefighter, Can I Deduct The Cost Of My Uniforms?
The cost and upkeep of work clothes is deductible if you must wear the
clothes as a condition of your employment and if the clothes are not suitable
for everyday wear. Firefighters, postal carriers, health care workers,
professional athletes, and delivery workers can generally deduct the cost of
work clothes. Workers may also deduct the cost of necessary protective clothing
such as safety shoes, safety glasses, work gloves, and hard hats.
I
Spent A Significant Amount Of Money Looking For A New Job, But Then Decided To
Stay Put. Can I Still Deduct My Job Search Expenses?
You may claim certain expenses you incur in looking for a new job in your
present occupation, even if you do not find or take a new job. You may not claim
a deduction if you are looking for a job in a new occupation or if you are
seeking employment for the first time.
As
An Employee, It Is Important That I Keep Up To Date On New Technology. Can I
Deduct The Cost Of The Professional Journal I Subscribe Too?
According to tax law, subscriptions to professional and trade journals
qualify as miscellaneous itemized deductions as long as these publications
relate to your work. Tax rule says that you may write off magazine subscriptions
only one year at a time. You may not write off the cost of a three-year
subscription all in one year.
Can
I Deduct The Commissions I Pay To Purchase Securities?
You may not write off commissions and other expenses you pay when you
purchase investments. Those expenses are considered part of the cost of your
investment and contribute to the property’s basis, that is, its cost for tax
purposes.
Is
It True That I Can Claim As Miscellaneous Itemized Deductions, Costs I Pay For
Tax Return Preparation And Assistance?
You usually can write off, in the year you pay them, tax counsel and tax
return preparation fees related to your federal taxes. In addition, you may be
entitled to deduct the cost of advice you receive for gift and estate planning
relating to tax matters. The cost of tax planning and preparation software and
books is deductible as well; as is any fee you pay for filing your return
electronically. These costs are deductible in the year paid. For example, if in
April 1999, you pay your accountant to prepare your 1998 tax return, the fee is
deducted on your 1999 return.
Are
Legal Fees I Pay In Connection With My Divorce Deductible As A Miscellaneous
Itemized Deduction?
Attorney fees incurred in connection with legal separation, divorce, or
support agreements are generally not deductible. However, attorney fees related
to obtaining alimony payments may be deductible because they pertain to
producing taxable income. The cost of legal advice about the tax consequences of
alimony and property settlement may also be claimed as a miscellaneous itemized
deduction.