Unreimbursed Employee Expenses and Miscellaneous Deductions
The IRS allows you to deduct unreimbursed employee expenses and miscellaneous deductions over 2% of your adjusted gross income. So for example if you make $100,000, then only the expenses in over $2,000 are deductible.
What are unreimbursed employee expenses and miscellaneous deductions? Here are some common examples, but these lists are by no means comprehensive:
Unreimbursed Employee Expenses
- Union Dues
- Uniforms that you paid for
- Business use of your home if for the convenience of your employer
Miscellaneous Deductions
- Tax preparation fees
- Investment Fees (paying someone to help you produce taxable income)
- Investment Publication Fees
- Safe Deposit Box
A bit of good news is that you get to add all of the above amounts and then apply the 2% limit to the total. The expense is reported on Schedule A. If you have sizeable unreimbursed employee expenses, this can be a great money saver.
The bad news is that your deduction may be subject to the alternative minimum tax. If this happens, the deduction is essentially not allowed on your federal income tax return (although it maybe allowed for your state income tax return). If you live in California, you're likely to be subject to alterntive minimum tax (AMT) if your income is over $225,000, but the AMT can strike at far lower or far higher income levels as well depending on your filing status, state tax withholding, and so on.
Official documentation:
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IRS Publication 529 (miscellaneous deductions)