Keep Track of Miscellaneous Deductions
Miscellaneous deductions such as certain work-related expenses you paid for as an employee can reduce your tax bill, but you must itemize deductions when you file to claim these costs. If you usually claim the standard deduction, think about itemizing instead because you might be able to pay less tax. Here are some tax tips that may help you reduce your taxes:
Deductions Subject to the Limit. You can deduct most miscellaneous costs only if their sum is more than two 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.
- Tools for your job.
- Union dues.
- 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 of your return.
Deductions Not Subject to the Limit. Some deductions are not subject to the two 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 personal property such as works of art, stocks, and bonds.
- Gambling losses up to the total of your gambling winnings.
- Losses from Ponzi-type investment schemes.
You claim allowable miscellaneous deductions on Schedule A, Itemized Deductions, but keep in mind, however, that there are many expenses that you cannot deduct. For example, you can’t deduct personal living or family expenses.
Need more information about itemizing deductions or help setting up a system to track your itemized deductions? Don’t hesitate to call.