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Itemizing your deductions (as opposed to claiming the standard deduction<\/a>) means that you may be able to deduct certain miscellaneous expenses<\/em> on your income tax return.<\/p>\n Miscellaneous tax deductions can reduce your taxable income<\/a>, which in turn helps lower the amount of tax you owe. Unfortunately, miscellaneous deductions are commonly misunderstood.<\/p>\n >><\/span>\u00a0Start Your FREE E-file<\/span><\/strong><\/a><\/p>\n Here are 7 things you should know about miscellaneous deductions:<\/p>\n This has two implications. First, it means that you have to file IRS Form 1040<\/a> (not Form 1040A or Form 1040EZ).\u00a0 It also means that you have to itemize your deductions<\/a> in order to claim your miscellaneous expenses.<\/p>\n If the sum of your miscellaneous deductions plus the rest of your itemized deductions are less than your standard deduction amount, then claiming miscellaneous deductions does not offer enough benefit. In this case, you should probably claim the standard deduction instead.<\/p>\n RELATED: Top 5 Tax Deductions for Individuals<\/a><\/p>\n The money that you pay to prepare\/file your income taxes can be deducted on your tax return. This includes the cost of tax preparation software and professional tax preparer<\/a> fees. However, you must incur the expenses in the same year for which you are filing your tax return. For example, if you pay to have your 2014 return prepared\/filed in February 2015, you can deduct the cost on your 2015 tax return (because that is the year the cost was incurred). According to the IRS, approximately 22 million people claim this deduction.<\/p>\n If you have to spend money on items that are required for your job, you may be able to deduct them as a miscellaneous deduction. Note that you cannot claim this tax deduction if your employer reimbursed you in any way, or if you derived significant benefits from the expense.<\/p>\n If you subscribe to work-related publications, you can deduct the cost of these publications as a miscellaneous deduction. This doesn\u2019t mean that you should keep your receipt every time you buy a magazine at the checkout. Only publications that are related to your line of work qualify for a deduction.<\/p>\n RELATED: 5 Tax Deductions for Businesses<\/a><\/p>\n There are essentially two types of miscellaneous deductions. The first type is subject to a 2% limit. That means you can only deduct the portion of your expenses that exceeds 2% of your Adjusted Gross Income (AGI)<\/a>. It includes expenses such as unreimbursed employee expenses, union dues, and work-related travel. If your total miscellaneous expenses are less than 2% of your AGI, you cannot claim them for a tax deduction.<\/p>\n The second type of miscellaneous deduction is not subject to the 2% limit. This includes expenses like gambling losses, losses from Ponzi-type investment schemes, and certain casualty and theft losses.<\/p>\n If you make money from a hobby but it doesn\u2019t qualify as a Schedule C business, you may be able to claim a miscellaneous deduction for your hobby expenses. Note that the recordkeeping requirements for this deduction are the same as for any business expense.<\/p>\n Additionally, you can only deduct up to the amount of income you made from the hobby. That income should be reported on Line 21 of Form 1040.<\/p>\n1. Miscellaneous Deductions Are Reported on Schedule A of Form 1040<\/h3>\n
2. You Can Deduct Tax Preparation Fees as a Miscellaneous Deduction<\/h3>\n
3. Miscellaneous Deductions Are Where You Report Business Expenses If You Don\u2019t Own the Business<\/h3>\n
4. Most Miscellaneous Deductions Are Subject to a 2% Threshold<\/h3>\n
5. You Can Deduct Hobby Expenses<\/h3>\n