Other Miscellaneous Itemized Deductions

Miscellaneous Itemized Not Subject to the 2% of the AGI Floor

A variety of deductions other than medical, taxes, interest, contributions, and personal casualties and thefts are allowed in the Code as miscellaneous itemized deductions but are also not subject to the 2% of AGI floor.

The primary deductions in this category include:

• Impairment-related work expenses incurred by disabled workers.
• Deductions related to income in respect of a decedent (discussed earlier).
• Unrecovered cost basis in annuity contracts on the final return of a deceased taxpayer.
• Unrecovered investment in a pension on the final return of a deceased taxpayer.
• Gambling losses (only to the extent of gambling winnings for an amateur gambler).
•  Certain expenses of performing artists.Gambling losses (only to the extent of gambling winnings for an amateur gambler).
• Certain expenses of performing artists.

Miscellaneous Itemized Deductions Subject to the 2% of AGI Floor

There are a few deductible expenditures which are subject to the 2% of AGI floor other than employment related expenses.

 Examples of such miscellaneous itemized deductions include:

• Investment expenses related to investments other than rents and royalties (e.g., stock newsletters). Safety deposit box rentals are deductible if used to store securities; if only used to store a will, the cost would not be deductible.
• Allocated investment fees of nonpublicly offered mutual funds are subject to the 2% floor (such amounts of expense are shown with income on the 1099-DIV); publicly offered mutual funds do not pass such expenses through; they offset income directly and the net amount is shown on Form 1099-DIV.
• Tax return preparation fees and tax-related litigation costs.