New for 2018: All miscellaneous itemized deductions that were subject to the 2% of Adjusted Gross Income limitation were eliminated. This includes Employee Business Expenses previously reported of Form 2106. The menu remains in the program for state reporting purposes only.
Tax Years Prior to 2018:
Taxpayers can generally deduct certain miscellaneous deductions on Schedule A. The amount of these expenses that is greater than 2% of the taxpayer’s adjusted gross income is deductible.
Tax Return Preparation – Taxpayers can deduct expenses for the preparation of their federal tax return.
Safe Deposit Box Rental – Taxpayers can deduct the expense for the rental of a safe deposit box if it is used to store taxable income producing stocks, bonds, or investment-related documents. The expense is not deductible if the safe deposit box is used only for other personal items.
Investment Fees and Expenses – Taxpayers can deduct fees and expenses associated with their investments. Keystone Tax Solutions Pro pulls these amounts to Schedule A from other areas of the return. The amount can be manually adjusted if needed.
Other Misc Deductions (subject to 2%) –
Union of Professional Dues – Taxpayers can deduct union membership dues and initiation fees as well as assessments for benefit payments to unemployed union members. Amounts paid that provide funds for the payment of sick, accident, or death benefits as well as contributions to a pension fund even if the union requires you to make the contributions are not deductible.
Job Search Expenses – Taxpayers can deduct expenses incurred in looking for a new job in their current occupation. Job search expenses are not deductible if they are incurred while looking for a new job in a new occupation, there was a substantial break between the ending of the taxpayer’s last job and the time they began looking for a new one or if the taxpayer is looking for a first time job.
Uniforms – Taxpayers can deduct expenses for the cost and upkeep of work clothing if the taxpayer must wear them as a condition of employment and the clothes are not suitable for every day wear.
Small Tools Used in Work – Taxpayers can generally deduct amount spent for tools used for work if the tools wear out and are thrown away within 1 year from the date of purchase.
Job Supplies – Taxpayers can deduct the amount spent for supplies used for work.
Depreciation & Form 4562 – Taxpayers can deduct depreciation expenses for computers that their employer requires them to use for work if the computer’s use is for the convenience of the employer and is required as a condition of employment. See IRS Publication 529 for details on how to figure depreciation expenses.
Business Use of Home Worksheet – Taxpayers can deduct part of their operating expenses and depreciation of their home if part of the home is used regularly and exclusively for business purposes. The deduction for the business use of home can be taken if the taxpayer uses the home as their principal place of business, or as a place to meet or deal with patients, clients or customers in the normal course of business. For details on how to fill out the worksheet, click here.
Other Unreimbursed Employee Expenses – Click here to view a list of other items that may be deductible as unreimbursed employee expenses.
- Business bad debt of an employee
- Business liability insurance premiums
- Damages paid to a former employer for breach of an employment contract
- Depreciation on a computer your employer requires you to use in your work
- Dues to a chamber of commerce if membership helps you do your job
- Dues to professional societies
- Laboratory breakage fees
- Legal fees related to your job
- Legal fees related to your job
- Malpractice insurance premiums
- Medical examinations required by an employer
- Occupational taxes
- Repayment of an income aid payment received under an employer’s plan
- Research expenses of a college professor
- Rural mail carriers’ vehicle expenses
- Subscriptions to professional journals and trade magazines related to your work
- Travel, transportation, meals, entertainment, gifts, and local lodging related to your work
- Work-related education
Additional Information:
IRS Publication 529 – Miscellaneous Deductions (2018)