Miscellaneous deductions

Chapter 29
Miscellaneous deductions


What’s New

Standard mileage rate. The 2014 rate for business use of a vehicle is 56 cents per mile.

This chapter explains which expenses you can claim as miscellaneous itemized deductions on Schedule A (Form 1040). You must reduce the total of most miscellaneous itemized deductions by 2% of your adjusted gross income. This chapter covers the following topics.

  • Deductions subject to the 2% limit.
  • Deductions not subject to the 2% limit.
  • Expenses you cannot deduct.

Useful Items

You may want to see:


  •  463 Travel, Entertainment, Gift, and Car Expenses
  •  525 Taxable and Nontaxable Income
  •  529 Miscellaneous Deductions
  •  535 Business Expenses
  •  587 Business Use of Your Home (Including Use by Daycare Providers)
  •  946 How To Depreciate Property

Form (and Instructions)

  •  Schedule A (Form 1040) Itemized Deductions
  •  2106 Employee Business Expenses
  •  2106-EZ Unreimbursed Employee Business Expenses

Deductions Subject to the 2% Limit

You can deduct certain expenses as miscellaneous itemized deductions on Schedule A (Form 1040). You can claim the amount of expenses that is more than 2% of your adjusted gross income. You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. Your adjusted gross income is the amount on Form 1040, line 38.

Generally, you apply the 2% limit after you apply any other deduction limit. For example, you apply the 50% (or 80%) limit on business-related meals and entertainment (discussed in chapter 27) before you apply the 2% limit.

Deductions subject to the 2% limit are discussed in the three categories in which you report them on Schedule A (Form 1040).

  • Unreimbursed employee expenses (line 21).
  • Tax preparation fees (line 22).
  • Other expenses (line 23).

Unreimbursed Employee Expenses (Line 21)

Generally, you can deduct on Schedule A (Form 1040), line 21, unreimbursed employee expenses that are:

  • Paid or incurred during your tax year,
  • For carrying on your trade or business of being an employee, and
  • Ordinary and necessary.

An expense is ordinary if it is common and accepted in your trade, business, or profession. An expense is necessary if it is appropriate and helpful to your business. An expense does not have to be required to be considered necessary.

Examples of unreimbursed employee expenses are listed next. The list is followed by discussions of additional unreimbursed employee expenses.

Business Liability Insurance

You can deduct insurance premiums you paid for protection against personal liability for wrongful acts on the job.

Damages for Breach of Employment Contract

If you break an employment contract, you can deduct damages you pay your former employer that are attributable to the pay you received from that employer.

Depreciation on Computers

You can claim a depreciation deduction for a computer that you use in your work as an employee if its use is:

  • For the convenience of your employer, and
  • Required as a condition of your employment.

For more information about the rules and exceptions to the rules affecting the allowable deductions for a home computer, see Publication 529.

Dues to Chambers of Commerce and Professional Societies

You may be able to deduct dues paid to professional organizations (such as bar associations and medical associations) and to chambers of commerce and similar organizations, if membership helps you carry out the duties of your job. Similar organizations include:

  • Boards of trade,
  • Business leagues,
  • Civic or public service organizations,
  • Real estate boards, and
  • Trade associations.

Lobbying and political activities. You may not be able to deduct that part of your dues that is for certain lobbying and political activities. See Dues used for lobbying under Nondeductible Expenses, later.

Educator Expenses

Text intentionally omitted. If you were an educator in 2014, you can deduct educator expenses as a miscellaneous itemized deduction subject to the 2% limit.

Home Office

If you use a part of your home regularly and exclusively for business purposes, you may be able to deduct a part of the operating expenses and depreciation of your home.

You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively:

  • As your principal place of business for any trade or business,
  • As a place to meet or deal with your patients, clients, or customers in the normal course of your trade or business, or
  • In the case of a separate structure not attached to your home, in connection with your trade or business.

The regular and exclusive business use must be for the convenience of your employer and not just appropriate and helpful in your job. See Publication 587 for more detailed information and a worksheet.