If you have deductible expenses that qualify as miscellaneous itemized deductions, you can deduct certain of those expenses only to the extent that they exceed 2% of your adjusted gross income. For an explanation of deductible and nondeductible expenses, refer to Publication 529, Miscellaneous Deductions.
There are three types of expenses that are subject to the 2% limit. They are unreimbursed employee expenses, tax preparation fees and certain other expenses.
Certain unreimbursed employee expenses are deductible as miscellaneous itemized deductions on Form 1040, Schedule A (PDF). To be deductible, the expense must be:
- Paid or incurred in the tax year
- For carrying on your trade or business of being an employee, and
- Ordinary and necessary
- Produce or collect taxable income that must be included in your gross income,
- Manage, conserve, or maintain property held for producing such income, or
- Determine, contest, pay, or claim a refund of any tax.
For additional information, refer to the Form 1040, Schedule A Instructions (PDF), Form 2106 Instructions (PDF), Form 2106-EZ (PDF), and Publication 529, Miscellaneous Deductions. If you want information about work-related educational expenses, refer to Topic 513. For further information on employee business expenses, refer to Topic 514. For information about miscellaneous deductions not subject to the 2% limit, refer to Publication 529.
Page Last Reviewed or Updated: August 19, 2014