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Category: Finding Deductions

What are the qualifications for "miscellaneous deductions"?

To qualify to be entered as a Miscellaneous Deduction, the expense must be an expense that was paid for one of the following:

  1. To produce or collect income that is required to be included in your gross income;
  2. To manage, conserve, or maintain property held for producing income that is required to be included in your gross income; or
  3. To determine, contest, pay, or claim a refund of any tax.

Any deduction that you specifically add as an additional Miscellaneous Deduction will be subject to the 2% rule*. For more information on the 2% rule, click here.

Examples:

  • Appraisal fees for a casualty loss or charitable contribution.
  • Clerical help and office rent in caring for investments.
  • Depreciation on home computers used for investments.
  • Excess deductions (including administrative expenses) allowed a beneficiary on termination of an estate or trust.
  • Fees to collect interest and dividends.
  • Hobby expense, but generally not more than hobby income.
  • Indirect miscellaneous deductions of pass-through entities.
  • Legal fees related to producing or collecting taxable income or getting tax advice.
  • Loss on traditional IRAs or Roth IRAs, when all amounts have been distributed to you.
  • Loss on deposits in an insolvent or bankrupt financial institution.
  • Repayments of income.
  • Service charges on dividend reinvestment plans.
  • Tax advice fees.
  • Trustee's fees for your IRA, if separately billed and paid.

For in-depth, detailed descriptions of these deductions, please reference IRS Publication 529.

*When preparing your return, enter the full amount of the expenses in each applicable entry field within your account. TaxSlayer will calculate the amount of the deduction that is allowable based on the 2% rule.