Taxpayers generally can deduct the items listed below as miscellaneous itemized deductions. They are not subject to the 2% limit.
Amortizable Premium on Taxable Bonds – If the amount a taxpayer pays for a bond is greater than its principal amount, the excess is considered bond premium. If the taxpayer elects to amortize the premium on taxable bonds, the amortization of the premium can be deducted to offset interest income on the bond.
Click here for IRS Publication 529 descriptions on what bond premiums can be deducted.
Fed Estate Tax on Income in Respect of a Decedent – Taxpayers can deduct the federal estate tax attributable to income in respect of a decedent that as the beneficiary was included in their gross income. See Publication 559 for information about figuring the amount of this deduction.
Gambling Losses to the Extent of Gambling Winnings
Impairment-Related Work Expenses – Taxpayers with a physical or mental disability that limits employment, or substantially limits one or more major life activities, such as performing manual tasks, walking, speaking, breathing, learning, and working, impairment-related work expenses can be deducted if:
- the item or service enables the taxpayer to work
- the item is needed because of the taxpayer’s disabling impairment
- the cost is paid by the taxpayer and not reimbursed
- the expense is reasonable; the taxpayer paid the standard charge for the item or service
- the expense was paid in a month in which the taxpayer was working
Repayment under Claim of Right – If the taxpayer repaid more than $3,000 that was included in their income in an earlier year, they may be able to deduct the amount that was repaid, or take a credit against their tax. See Repayments in Publication 525 for more information.
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