Tax Tip

Here are some things you should know about miscellaneous tax deductions:

Deductions Subject to the 2 Percent Limit. You can deduct
the amount of certain miscellaneous expenses that exceed 2 percent of your
adjusted gross income. Deductions subject to the 2 percent limit include:

• Unreimbursed employee expenses such as searching for a
       new job in the same profession, certain work clothes and uniforms, work
       tools, union dues, and work-related travel and transportation.
• Tax preparation fees.
• Other expenses that you pay to: 
• Produce or collect taxable income,
• Manage, conserve, or maintain property held to produce taxable income, or
• Determine, contest, pay, or claim a refund of any tax.

Examples of other expenses include certain investment fees and expenses,
some legal fees, hobby expenses that are not more than your hobby income and
rental fees for a safe deposit box if it is not used to store jewelry and other
personal effects. 

Deductions Not Subject to the 2 Percent Limit.  The
list of deductions not subject to the 2 percent limit of adjusted gross income
includes:

• Casualty and theft losses from income-producing
       property such as damage or theft of stocks, bonds, gold, silver, vacant
       lots, and works of art.
• Gambling losses up to the amount of gambling winnings.
• Impairment-related work expenses of persons with disabilities.
• Losses from Ponzi-type investment schemes.

Qualified miscellaneous deductions are reported on Schedule A, Itemized
Deductions. Keep records of your miscellaneous deductions to make it easier for
you to prepare your tax return when the filing season arrives.

There are also many expenses that you cannot
deduct such as personal living or family expenses. You can find more
information and examples in IRS Publication 529, Miscellaneous Deductions,
which is available on IRS.gov or by calling me at 973-428-8885.