Miscellaneous Itemized Deductions

For people who have them, the two biggest items under the "miscellaneous deduction" umbrella are employee business expenses, and deductions related to investment income. These are discussed elsewhere in this Guide.

Warning Higher-income taxpayers lose a portion of the value of their itemized deductions starting in 2013. The amount lost will be three-percent of the total of the taxpayer's adjusted gross income exceed the applicable threshold, which is determined by filing status. However, the total amount cannot be reduced below 80 percent and deductions for medical expenses, casualty losses, and wagering losses as well as expenses related to earning income are excluded from this particular phaseout. The thresholds for 2013 are shown below. These amounts are indexed for inflation starting in 2014. Married, filing jointly and surviving spouses = $300,000 Heads of households = $275,000 Unmarried taxpayers = $250,000 Married, filing separately = $150,000

Line 21 of Schedule A is used to report employee business expenses transferred from Form 2106 or 2106-EZ, and Line 23 is used to report investment expenses. Hobby expenses are deductible on Line 23 as well.

However, there are a number of other things that count as miscellaneous itemized deductions.

Job search expenses. Expenses that you pay in looking for another job in your present occupation can be deducted, even if you don't find a new job. However, you can't deduct the expenses of looking for your first job or a job after you've been out of the workforce for an extended period of time. You also can't deduct expenses of seeking the first job in a new occupation.

If your job search qualifies, you can deduct costs for things like writing, printing, and distributing a resume; using an employment agency, outplacement agency or career counselor; and for traveling to interviews or to a different city to look for work. If you use the standard mileage rate to deduct car expenses, use the business rate. The standard mileage rate for 2013 was 56.5 cents per mile.

Tax preparation expenses. You can deduct, as a miscellaneous expense, amounts that you pay to determine the amount of any tax due, to pay the tax, or to claim a refund or contest the amount of tax due. This applies to federal income tax, as well as any other type of tax that you pay.

So, you can deduct the cost of purchasing tax books or software, of copying your tax returns, and even postage costs for obtaining a return receipt when you mail your tax forms. If you pay a fee to file your tax return electronically, you can deduct that cost. If you get professional help in preparing your return or in obtaining appraisals needed to determine the amount of tax due, you can deduct those fees.

Other expenses. There are a few types of miscellaneous expenses that are not subject to the 2 percent of AGI limit.