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Taxact.com 2011Free H&r Block EfileAmend A 2013 Tax ReturnNew York State Unemployment Tax FormsFile Your State Taxes Online For FreeHow To File Your State TaxesTax Forms Download Ez 1040Free 1040x OnlineFiling Taxes Previous Years1040 2012Can I Still File 2011 Taxes OnlineFile A 1040xIrs Forms 1040 2011File An Amended Tax Return For 2011File Free State TaxesHow To File A Tax Amendment1040ez FilingFile 2011 Taxes For FreeForm 1040ez InstructionsHr Block Free Efile1040ez Tax Forms DownloadsWhere Can I File Back Taxes OnlineForm 1040ez 2011 InstructionsFree State File1040ez 2012 FormForm 1040 Ez 2012H & R Block TaxFile 2006 Taxes Free2010 1040Federal And State Income Tax FormsFile Past Taxes OnlineWww Hrblock ComFree File State TaxesRevised Tax ReturnUnemployment Tax FormFile State Return FreeHr Block E FileTurbotax 2011E File Tax ReturnsStudent Taxes 2013

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H and r block on line Publication 544 - Additional Material Table of Contents Tax Publications for Business TaxpayersSee How To Get Tax Help for a variety of ways to get publications, including by computer, phone, and mail. H and r block on line General Guides 1 Your Rights as a Taxpayer 17 Your Federal Income Tax (For Individuals) 334 Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) 509 Tax Calendars 910 IRS Guide to Free Tax Services Employer's Guides 15 (Circular E), Employer's Tax Guide 15-A Employer's Supplemental Tax Guide 15-B Employer's Tax Guide to Fringe Benefits 51 (Circular A), Agricultural Employer's Tax Guide 80 (Circular SS), Federal Tax Guide For Employers in the U. H and r block on line S. H and r block on line Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands 926 Household Employer's Tax Guide Specialized Publications 225 Farmer's Tax Guide 463 Travel, Entertainment, Gift, and Car Expenses 505 Tax Withholding and Estimated Tax 510 Excise Taxes (Including Fuel Tax Credits and Refunds) 515 Withholding of Tax on Nonresident Aliens and Foreign Entities 517 Social Security and Other Information for Members of the Clergy and Religious Workers 527 Residential Rental Property 534 Depreciating Property Placed in Service Before 1987 535 Business Expenses 536 Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 537 Installment Sales 538 Accounting Periods and Methods 541 Partnerships 542 Corporations 544 Sales and Other Dispositions of Assets 551 Basis of Assets 556 Examination of Returns, Appeal Rights, and Claims for Refund 560 Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans) 561 Determining the Value of Donated Property 583 Starting a Business and Keeping Records 587 Business Use of Your Home (Including Use by Daycare Providers) 594 What You Should Know About The IRS Collection Process 595 Capital Construction Fund for Commercial Fishermen 597 Information on the United States-Canada Income Tax Treaty 598 Tax on Unrelated Business Income of Exempt Organizations 686 Certification for Reduced Tax Rates in Tax Treaty Countries 901 U. H and r block on line S. H and r block on line Tax Treaties 908 Bankruptcy Tax Guide 925 Passive Activity and At-Risk Rules 946 How To Depreciate Property 947 Practice Before the IRS and Power of Attorney 1544 Reporting Cash Payments of Over $10,000 (Received in a Trade or Business) 1546 Taxpayer Advocate Service - Your Voice at the IRS Spanish Language Publications 1SP Derechos del Contribuyente 179 (Circular PR), Guía Contributiva Federal Para Patronos Puertorriqueños 579SP Cómo Preparar la Declaración de Impuesto Federal 594SP Qué es lo Debemos Saber Sobre El Proceso de Cobro del IRS 850 English-Spanish Glossary of Words and Phrases Used in Publications Issued by the Internal Revenue Service 1544SP Informe de Pagos en Efectivo en Exceso de $10,000 (Recibidos en una Ocupación o Negocio) Commonly Used Tax FormsSee How To Get Tax Help for a variety of ways to get forms, including by computer, phone, and mail. H and r block on line Form Number and Form Title W-2 Wage and Tax Statement W-4 Employee's Withholding Allowance Certificate 940 Employer's Annual Federal Unemployment (FUTA) Tax Return 941 Employer's QUARTERLY Federal Tax Return 944 Employer's ANNUAL Federal Tax Return 1040 U. H and r block on line S. H and r block on line Individual Income Tax Return Sch. H and r block on line A & B Itemized Deductions & Interest and Ordinary Dividends Sch. H and r block on line C Profit or Loss From Business Sch. H and r block on line C-EZ Net Profit From Business Sch. H and r block on line D Capital Gains and Losses Sch. H and r block on line E Supplemental Income and Loss Sch. H and r block on line F Profit or Loss From Farming Sch. H and r block on line H Household Employment Taxes Sch. H and r block on line J Income Averaging for Farmers and Fishermen Sch. H and r block on line R Credit for the Elderly or the Disabled Sch. H and r block on line SE Self-Employment Tax 1040-ES Estimated Tax for Individuals 1040X Amended U. H and r block on line S. H and r block on line Individual Income Tax Return 1065 U. H and r block on line S. H and r block on line Return of Partnership Income Sch. H and r block on line D Capital Gains and Losses Sch. H and r block on line K-1 Partner's Share of Income, Deductions, Credits, etc. H and r block on line 1120 U. H and r block on line S. H and r block on line Corporation Income Tax Return Sch. H and r block on line D Capital Gains and Losses 1120S U. H and r block on line S. H and r block on line Income Tax Return for an S Corporation Sch. H and r block on line D Capital Gains and Losses and Built-In Gains Sch. H and r block on line K-1 Shareholder's Share of Income, Deductions, Credits, etc. H and r block on line 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2441 Child and Dependent Care Expenses 2848 Power of Attorney and Declaration of Representative 3800 General Business Credit 3903 Moving Expenses 4562 Depreciation and Amortization 4797 Sales of Business Property 4868 Application for Automatic Extension of Time To File U. H and r block on line S. H and r block on line Individual Income Tax Return 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 6252 Installment Sale Income 7004 Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns 8283 Noncash Charitable Contributions 8300 Report of Cash Payments Over $10,000 Received in a Trade or Business 8582 Passive Activity Loss Limitations 8606 Nondeductible IRAs 8822 Change of Address 8829 Expenses for Business Use of Your Home 8949 Sales and Other Dispositions of Capital Assets Prev  Up  Next   Home   More Online Publications
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Circular 230 Tax Professionals

Circular No. 230 (Rev. 8-2011)
Rules Governing Practice Before the Internal Revenue Service

The Office of Professional Responsibility (OPR) At-A-Glance
Understand the Office of Professional Responsibility's mission and operations as it pertains to the standards of practice for tax professionals.

Frequently Asked Questions (FAQ's)
The Office of Professional Responsibility: Frequently Asked Questions.

OPR's Disciplinary Stats
Information regarding OPR's calendar year(s) disciplinary stats

Office of Professional Responsibility Webinars
Learn more about Practice by viewing IRS/OPR webinars from the OPR's Director.

Latest News from Office of Professional Responsibility (OPR)
The latest news from OPR.

Rights and responsibilities of practitioners in Circular 230 disciplinary cases
Rules and procedures for practitioners who fail to comply with Circular 230.

Restrictions on Practitioners Disciplined by OPR
What tax practice activities are prohibited while under suspension/disbarment.

Circular 230 Disciplinary Proceedings
An Overview.

Announcements of Disciplinary Sanctions
Office of Professional Responsibility's Final Agency Decisions in disciplinary cases, and the Internal Revenue Bulletins List of Announcements for Disbarments, Suspensions, Resignations, and Censures Since 1998 taken Against Tax Professionals.

Information for Tax Professionals
Office of Professional Responsibility/Circular 230 - related issues.

Contingent Fees Under Circular 230
Contingent Fees Under Circular 230 - Notice 2008–43.

OPR 9/11/09 Discipline Policy on FBAR Violations by Practitioners
Statement from 9/11/09 re: Discipline Policy on FBAR Violations by Practitioners

Make a Complaint About a Tax Return Preparer
Taxpayers can use this site to find out how to file a complaint about a tax preparer.

Enrolled Agent Program
Special competencies are required to represent your client for audits and related tax matters before the IRS. Find out about the Special Enrollment Examination and how to become an enrolled agent.

Joint Board for the Enrollment of Actuaries
Information for Enrolled Actuaries, or for individuals who wish to become Enrolled Actuaries.

Enrolled Retirement Plan Agent Program
Information for enrolled retirement plan agents and individuals who wish to become enrolled retirement plan agents.

Page Last Reviewed or Updated: 26-Feb-2014

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H and r block on line 28. H and r block on line   Miscellaneous Deductions Table of Contents What's New Introduction Useful Items - You may want to see: Deductions Subject to the 2% LimitUnreimbursed Employee Expenses (Line 21) Tax Preparation Fees (Line 22) Other Expenses (Line 23) Deductions Not Subject to the 2% LimitList of Deductions Nondeductible ExpensesList of Nondeductible Expenses What's New Standard mileage rate. H and r block on line  The 2013 rate for business use of a vehicle is 56½ cents per mile. H and r block on line Introduction This chapter explains which expenses you can claim as miscellaneous itemized deductions on Schedule A (Form 1040). H and r block on line You must reduce the total of most miscellaneous itemized deductions by 2% of your adjusted gross income. H and r block on line This chapter covers the following topics. H and r block on line Deductions subject to the 2% limit. H and r block on line Deductions not subject to the 2% limit. H and r block on line Expenses you cannot deduct. H and r block on line You must keep records to verify your deductions. H and r block on line You should keep receipts, canceled checks, substitute checks, financial account statements, and other documentary evidence. H and r block on line For more information on recordkeeping, get Publication 552, Record- keeping for Individuals. H and r block on line Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income 529 Miscellaneous Deductions 535 Business Expenses 587 Business Use of Your Home (Including Use by Daycare Providers) 946 How To Depreciate Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses Deductions Subject to the 2% Limit You can deduct certain expenses as miscellaneous itemized deductions on Schedule A (Form 1040). H and r block on line You can claim the amount of expenses that is more than 2% of your adjusted gross income. H and r block on line You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. H and r block on line Your adjusted gross income is the amount on Form 1040, line 38. H and r block on line Generally, you apply the 2% limit after you apply any other deduction limit. H and r block on line For example, you apply the 50% (or 80%) limit on business-related meals and entertainment (discussed in chapter 26) before you apply the 2% limit. H and r block on line Deductions subject to the 2% limit are discussed in the three categories in which you report them on Schedule A (Form 1040). H and r block on line Unreimbursed employee expenses (line 21). H and r block on line Tax preparation fees (line 22). H and r block on line Other expenses (line 23). H and r block on line Unreimbursed Employee Expenses (Line 21) Generally, you can deduct on Schedule A (Form 1040), line 21, unreimbursed employee expenses that are: Paid or incurred during your tax year, For carrying on your trade or business of being an employee, and Ordinary and necessary. H and r block on line An expense is ordinary if it is common and accepted in your trade, business, or profession. H and r block on line An expense is necessary if it is appropriate and helpful to your business. H and r block on line An expense does not have to be required to be considered necessary. H and r block on line Examples of unreimbursed employee expenses are listed next. H and r block on line The list is followed by discussions of additional unreimbursed employee expenses. H and r block on line Business bad debt of an employee. H and r block on line Education that is work related. H and r block on line (See chapter 27. H and r block on line ) Legal fees related to your job. H and r block on line Licenses and regulatory fees. H and r block on line Malpractice insurance premiums. H and r block on line Medical examinations required by an employer. H and r block on line Occupational taxes. H and r block on line Passport for a business trip. H and r block on line Subscriptions to professional journals and trade magazines related to your work. H and r block on line Travel, transportation, entertainment, and gifts related to your work. H and r block on line (See chapter 26. H and r block on line ) Business Liability Insurance You can deduct insurance premiums you paid for protection against personal liability for wrongful acts on the job. H and r block on line Damages for Breach of Employment Contract If you break an employment contract, you can deduct damages you pay your former employer that are attributable to the pay you received from that employer. H and r block on line Depreciation on Computers You can claim a depreciation deduction for a computer that you use in your work as an employee if its use is: For the convenience of your employer, and Required as a condition of your employment. H and r block on line For more information about the rules and exceptions to the rules affecting the allowable deductions for a home computer, see Publication 529. H and r block on line Dues to Chambers of Commerce and Professional Societies You may be able to deduct dues paid to professional organizations (such as bar associations and medical associations) and to chambers of commerce and similar organizations, if membership helps you carry out the duties of your job. H and r block on line Similar organizations include: Boards of trade, Business leagues, Civic or public service organizations, Real estate boards, and Trade associations. H and r block on line Lobbying and political activities. H and r block on line   You may not be able to deduct that part of your dues that is for certain lobbying and political activities. H and r block on line See Dues used for lobbying under Nondeductible Expenses, later. H and r block on line Educator Expenses If you were an eligible educator in 2013, you can deduct up to $250 of qualified expenses you paid in 2013 as an adjustment to gross income on Form 1040, line 23, rather than as a miscellaneous itemized deduction. H and r block on line If you file Form 1040A, you can deduct these expenses on line 16. H and r block on line If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. H and r block on line However, neither spouse can deduct more than $250 of his or her qualified expenses. H and r block on line Home Office If you use a part of your home regularly and exclusively for business purposes, you may be able to deduct a part of the operating expenses and depreciation of your home. H and r block on line You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively: As your principal place of business for any trade or business, As a place to meet or deal with your patients, clients, or customers in the normal course of your trade or business, or In the case of a separate structure not attached to your home, in connection with your trade or business. H and r block on line The regular and exclusive business use must be for the convenience of your employer and not just appropriate and helpful in your job. H and r block on line See Publication 587 for more detailed information and a worksheet. H and r block on line Job Search Expenses You can deduct certain expenses you have in looking for a new job in your present occupation, even if you do not get a new job. H and r block on line You cannot deduct these expenses if: You are looking for a job in a new occupation, There was a substantial break between the ending of your last job and your looking for a new one, or You are looking for a job for the first time. H and r block on line Employment and outplacement agency fees. H and r block on line   You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation. H and r block on line Employer pays you back. H and r block on line   If, in a later year, your employer pays you back for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year. H and r block on line (See Recoveries in chapter 12. H and r block on line ) Employer pays the employment agency. H and r block on line   If your employer pays the fees directly to the employment agency and you are not responsible for them, you do not include them in your gross income. H and r block on line Résumé. H and r block on line   You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers if you are looking for a new job in your present occupation. H and r block on line Travel and transportation expenses. H and r block on line   If you travel to an area and, while there, you look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. H and r block on line You can deduct the travel expenses if the trip is primarily to look for a new job. H and r block on line The amount of time you spend on personal activity compared to the amount of time you spend in looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job. H and r block on line   Even if you cannot deduct the travel expenses to and from an area, you can deduct the expenses of looking for a new job in your present occupation while in the area. H and r block on line   You can choose to use the standard mileage rate to figure your car expenses. H and r block on line The 2013 rate for business use of a vehicle is 56½ cents per mile. H and r block on line See chapter 26 for more information. H and r block on line Licenses and Regulatory Fees You can deduct the amount you pay each year to state or local governments for licenses and regulatory fees for your trade, business, or profession. H and r block on line Occupational Taxes You can deduct an occupational tax charged at a flat rate by a locality for the privilege of working or conducting a business in the locality. H and r block on line If you are an employee, you can claim occupational taxes only as a miscellaneous deduction subject to the 2% limit; you cannot claim them as a deduction for taxes elsewhere on your return. H and r block on line Repayment of Income Aid Payment An “income aid payment” is one that is received under an employer's plan to aid employees who lose their jobs because of lack of work. H and r block on line If you repay a lump-sum income aid payment that you received and included in income in an earlier year, you can deduct the repayment. H and r block on line Research Expenses of a College Professor If you are a college professor, you can deduct research expenses, including travel expenses, for teaching, lecturing, or writing and publishing on subjects that relate directly to your teaching duties. H and r block on line You must have undertaken the research as a means of carrying out the duties expected of a professor and without expectation of profit apart from salary. H and r block on line However, you cannot deduct the cost of travel as a form of education. H and r block on line Tools Used in Your Work Generally, you can deduct amounts you spend for tools used in your work if the tools wear out and are thrown away within 1 year from the date of purchase. H and r block on line You can depreciate the cost of tools that have a useful life substantially beyond the tax year. H and r block on line For more information about depreciation, see Publication 946. H and r block on line Union Dues and Expenses You can deduct dues and initiation fees you pay for union membership. H and r block on line You can also deduct assessments for benefit payments to unemployed union members. H and r block on line However, you cannot deduct the part of the assessments or contributions that provides funds for the payment of sick, accident, or death benefits. H and r block on line Also, you cannot deduct contributions to a pension fund, even if the union requires you to make the contributions. H and r block on line You may not be able to deduct amounts you pay to the union that are related to certain lobbying and political activities. H and r block on line See Lobbying Expenses under Nondeductible Expenses, later. H and r block on line Work Clothes and Uniforms You can deduct the cost and upkeep of work clothes if the following two requirements are met. H and r block on line You must wear them as a condition of your employment. H and r block on line The clothes are not suitable for everyday wear. H and r block on line It is not enough that you wear distinctive clothing. H and r block on line The clothing must be specifically required by your employer. H and r block on line Nor is it enough that you do not, in fact, wear your work clothes away from work. H and r block on line The clothing must not be suitable for taking the place of your regular clothing. H and r block on line Examples of workers who may be able to deduct the cost and upkeep of work clothes are: delivery workers, firefighters, health care workers, law enforcement officers, letter carriers, professional athletes, and transportation workers (air, rail, bus, etc. H and r block on line ). H and r block on line Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear. H and r block on line However, work clothing consisting of white cap, white shirt or white jacket, white bib overalls, and standard work shoes, which a painter is required by his union to wear on the job, is not distinctive in character or in the nature of a uniform. H and r block on line Similarly, the costs of buying and maintaining blue work clothes worn by a welder at the request of a foreman are not deductible. H and r block on line Protective clothing. H and r block on line   You can deduct the cost of protective clothing required in your work, such as safety shoes or boots, safety glasses, hard hats, and work gloves. H and r block on line   Examples of workers who may be required to wear safety items are: carpenters, cement workers, chemical workers, electricians, fishing boat crew members, machinists, oil field workers, pipe fitters, steamfitters, and truck drivers. H and r block on line Military uniforms. H and r block on line   You generally cannot deduct the cost of your uniforms if you are on full-time active duty in the armed forces. H and r block on line However, if you are an armed forces reservist, you can deduct the unreimbursed cost of your uniform if military regulations restrict you from wearing it except while on duty as a reservist. H and r block on line In figuring the deduction, you must reduce the cost by any nontaxable allowance you receive for these expenses. H and r block on line   If local military rules do not allow you to wear fatigue uniforms when you are off duty, you can deduct the amount by which the cost of buying and keeping up these uniforms is more than the uniform allowance you receive. H and r block on line   You can deduct the cost of your uniforms if you are a civilian faculty or staff member of a military school. H and r block on line Tax Preparation Fees (Line 22) You can usually deduct tax preparation fees in the year you pay them. H and r block on line Thus, on your 2013 return, you can deduct fees paid in 2013 for preparing your 2012 return. H and r block on line These fees include the cost of tax preparation software programs and tax publications. H and r block on line They also include any fee you paid for electronic filing of your return. H and r block on line Other Expenses (Line 23) You can deduct certain other expenses as miscellaneous itemized deductions subject to the 2% limit. H and r block on line On Schedule A (Form 1040), line 23, you can deduct expenses that you pay: To produce or collect income that must be included in your gross income, To manage, conserve, or maintain property held for producing such income, or To determine, contest, pay, or claim a refund of any tax. H and r block on line You can deduct expenses you pay for the purposes in (1) and (2) above only if they are reasonably and closely related to these purposes. H and r block on line Some of these other expenses are explained in the following discussions. H and r block on line If the expenses you pay produce income that is only partially taxable, see Tax-Exempt Income Expenses , later, under Nondeductible Expenses. H and r block on line Appraisal Fees You can deduct appraisal fees if you pay them to figure a casualty loss or the fair market value of donated property. H and r block on line Casualty and Theft Losses You can deduct a casualty or theft loss as a miscellaneous itemized deduction subject to the 2% limit if you used the damaged or stolen property in performing services as an employee. H and r block on line First report the loss in Section B of Form 4684, Casualties and Thefts. H and r block on line You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. H and r block on line To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. H and r block on line For other casualty and theft losses, see chapter 25. H and r block on line Clerical Help and Office Rent You can deduct office expenses, such as rent and clerical help, that you have in connection with your investments and collecting the taxable income on them. H and r block on line Credit or Debit Card Convenience Fees You can deduct the convenience fee charged by the card processor for paying your income tax (including estimated tax payments) by credit or debit card. H and r block on line The fees are deductible in the year paid. H and r block on line Depreciation on Home Computer You can deduct depreciation on your home computer if you use it to produce income (for example, to manage your investments that produce taxable income). H and r block on line You generally must depreciate the computer using the straight line method over the Alternative Depreciation System (ADS) recovery period. H and r block on line But if you work as an employee and also use the computer in that work, see Publication 946. H and r block on line Excess Deductions of an Estate If an estate's total deductions in its last tax year are more than its gross income for that year, the beneficiaries succeeding to the estate's property can deduct the excess. H and r block on line Do not include deductions for the estate's personal exemption and charitable contributions when figuring the estate's total deductions. H and r block on line The beneficiaries can claim the deduction only for the tax year in which, or with which, the estate terminates, whether the year of termination is a normal year or a short tax year. H and r block on line For more information, see Termination of Estate in Publication 559, Survivors, Executors, and Administrators. H and r block on line Fees to Collect Interest and Dividends You can deduct fees you pay to a broker, bank, trustee, or similar agent to collect your taxable bond interest or dividends on shares of stock. H and r block on line But you cannot deduct a fee you pay to a broker to buy investment property, such as stocks or bonds. H and r block on line You must add the fee to the cost of the property. H and r block on line You cannot deduct the fee you pay to a broker to sell securities. H and r block on line You can use the fee only to figure gain or loss from the sale. H and r block on line See the Instructions for Form 8949 for information on how to report the fee. H and r block on line Hobby Expenses You can generally deduct hobby expenses, but only up to the amount of hobby income. H and r block on line A hobby is not a business because it is not carried on to make a profit. H and r block on line See Activity not for profit in chapter 12 under Other Income. H and r block on line Indirect Deductions of Pass-Through Entities Pass-through entities include partnerships, S corporations, and mutual funds that are not publicly offered. H and r block on line Deductions of pass-through entities are passed through to the partners or shareholders. H and r block on line The partners or shareholders can deduct their share of passed-through deductions for investment expenses as miscellaneous itemized deductions subject to the 2% limit. H and r block on line Example. H and r block on line You are a member of an investment club that is formed solely to invest in securities. H and r block on line The club is treated as a partnership. H and r block on line The partnership's income is solely from taxable dividends, interest, and gains from sales of securities. H and r block on line In this case, you can deduct your share of the partnership's operating expenses as miscellaneous itemized deductions subject to the 2% limit. H and r block on line However, if the investment club partnership has investments that also produce nontaxable income, you cannot deduct your share of the partnership's expenses that produce the nontaxable income. H and r block on line Publicly offered mutual funds. H and r block on line   Publicly offered mutual funds do not pass deductions for investment expenses through to shareholders. H and r block on line A mutual fund is “publicly offered” if it is: Continuously offered pursuant to a public offering, Regularly traded on an established securities market, or Held by or for at least 500 persons at all times during the tax year. H and r block on line   A publicly offered mutual fund will send you a Form 1099-DIV, Dividends and Distributions, or a substitute form, showing the net amount of dividend income (gross dividends minus investment expenses). H and r block on line This net figure is the amount you report on your return as income. H and r block on line You cannot further deduct investment expenses related to publicly offered mutual funds because they are already included as part of the net income amount. H and r block on line Information returns. H and r block on line   You should receive information returns from pass-through entities. H and r block on line Partnerships and S corporations. H and r block on line   These entities issue Schedule K-1, which lists the items and amounts you must report and identifies the tax return schedules and lines to use. H and r block on line Nonpublicly offered mutual funds. H and r block on line   These funds will send you a Form 1099-DIV, Dividends and Distributions, or a substitute form, showing your share of gross income and investment expenses. H and r block on line You can claim the expenses only as a miscellaneous itemized deduction subject to the 2% limit. H and r block on line Investment Fees and Expenses You can deduct investment fees, custodial fees, trust administration fees, and other expenses you paid for managing your investments that produce taxable income. H and r block on line Legal Expenses You can usually deduct legal expenses that you incur in attempting to produce or collect taxable income or that you pay in connection with the determination, collection, or refund of any tax. H and r block on line You can also deduct legal expenses that are: Related to either doing or keeping your job, such as those you paid to defend yourself against criminal charges arising out of your trade or business, For tax advice related to a divorce, if the bill specifies how much is for tax advice and it is determined in a reasonable way, or To collect taxable alimony. H and r block on line You can deduct expenses of resolving tax issues relating to profit or loss from business (Schedule C or C-EZ), rentals or royalties (Schedule E), or farm income and expenses (Schedule F), on the appropriate schedule. H and r block on line You deduct expenses of resolving nonbusiness tax issues on Schedule A (Form 1040). H and r block on line See Tax Preparation Fees , earlier. H and r block on line Loss on Deposits For information on whether, and if so, how, you may deduct a loss on your deposit in a qualified financial institution, see Loss on Deposits in chapter 25. H and r block on line Repayments of Income If you had to repay an amount that you included in income in an earlier year, you may be able to deduct the amount you repaid. H and r block on line If the amount you had to repay was ordinary income of $3,000 or less, the deduction is subject to the 2% limit. H and r block on line If it was more than $3,000, see Repayments Under Claim of Right under Deductions Not Subject to the 2% Limit, later. H and r block on line Repayments of Social Security Benefits For information on how to deduct your repayments of certain social security benefits, see Repayments More Than Gross Benefits in chapter 11. H and r block on line Safe Deposit Box Rent You can deduct safe deposit box rent if you use the box to store taxable income-producing stocks, bonds, or investment-related papers and documents. H and r block on line You cannot deduct the rent if you use the box only for jewelry, other personal items, or tax-exempt securities. H and r block on line Service Charges on Dividend Reinvestment Plans You can deduct service charges you pay as a subscriber in a dividend reinvestment plan. H and r block on line These service charges include payments for: Holding shares acquired through a plan, Collecting and reinvesting cash dividends, and Keeping individual records and providing detailed statements of accounts. H and r block on line Trustee's Administrative Fees for IRA Trustee's administrative fees that are billed separately and paid by you in connection with your individual retirement arrangement (IRA) are deductible (if they are ordinary and necessary) as a miscellaneous itemized deduction subject to the 2% limit. H and r block on line For more information about IRAs, see chapter 17. H and r block on line Deductions Not Subject to the 2% Limit You can deduct the items listed below as miscellaneous itemized deductions. H and r block on line They are not subject to the 2% limit. H and r block on line Report these items on Schedule A (Form 1040), line 28. H and r block on line List of Deductions Each of the following items is discussed in detail after the list (except where indicated). H and r block on line Amortizable premium on taxable bonds. H and r block on line Casualty and theft losses from income- producing property. H and r block on line Federal estate tax on income in respect of a decedent. H and r block on line Gambling losses up to the amount of gambling winnings. H and r block on line Impairment-related work expenses of persons with disabilities. H and r block on line Loss from other activities from Schedule K-1 (Form 1065-B), box 2. H and r block on line Losses from Ponzi-type investment schemes. H and r block on line See Losses from Ponzi-type investment schemes under Theft in chapter 25. H and r block on line Repayments of more than $3,000 under a claim of right. H and r block on line Unrecovered investment in an annuity. H and r block on line Amortizable Premium on Taxable Bonds In general, if the amount you pay for a bond is greater than its stated principal amount, the excess is bond premium. H and r block on line You can elect to amortize the premium on taxable bonds. H and r block on line The amortization of the premium is generally an offset to interest income on the bond rather than a separate deduction item. H and r block on line Part of the premium on some bonds may be a miscellaneous deduction not subject to the 2% limit. H and r block on line For more information, see Amortizable Premium on Taxable Bonds in Publication 529, and Bond Premium Amortization in chapter 3 of Publication 550, Investment Income and Expenses. H and r block on line Casualty and Theft Losses of Income-Producing Property You can deduct a casualty or theft loss as a miscellaneous itemized deduction not subject to the 2% limit if the damaged or stolen property was income-producing property (property held for investment, such as stocks, notes, bonds, gold, silver, vacant lots, and works of art). H and r block on line First, report the loss in Form 4684, Section B. H and r block on line You may also have to include the loss on Form 4797, Sales of Business Property if you are otherwise required to file that form. H and r block on line To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. H and r block on line For more information on casualty and theft losses, see chapter 25. H and r block on line Federal Estate Tax on Income in Respect of a Decedent You can deduct the federal estate tax attributable to income in respect of a decedent that you as a beneficiary include in your gross income. H and r block on line Income in respect of the decedent is gross income that the decedent would have received had death not occurred and that was not properly includible in the decedent's final income tax return. H and r block on line See Publication 559 for more information. H and r block on line Gambling Losses Up to the Amount of Gambling Winnings You must report the full amount of your gambling winnings for the year on Form 1040, line 21. H and r block on line You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. H and r block on line You cannot deduct gambling losses that are more than your winnings. H and r block on line You cannot reduce your gambling winnings by your gambling losses and report the difference. H and r block on line You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. H and r block on line Therefore, your records should show your winnings separately from your losses. H and r block on line Diary of winnings and losses. H and r block on line You must keep an accurate diary or similar record of your losses and winnings. H and r block on line Your diary should contain at least the following information. H and r block on line The date and type of your specific wager or wagering activity. H and r block on line The name and address or location of the gambling establishment. H and r block on line The names of other persons present with you at the gambling establishment. H and r block on line The amount(s) you won or lost. H and r block on line See Publication 529 for more information. H and r block on line Impairment-Related Work Expenses If you have a physical or mental disability that limits your being employed, or substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, and working, you can deduct your impairment-related work expenses. H and r block on line Impairment-related work expenses are ordinary and necessary business expenses for attendant care services at your place of work and for other expenses in connection with your place of work that are necessary for you to be able to work. H and r block on line Self-employed. H and r block on line   If you are self-employed, enter your impairment-related work expenses on the appropriate form (Schedule C, C-EZ, E, or F) used to report your business income and expenses. H and r block on line Loss From Other Activities From Schedule K-1 (Form 1065-B), Box 2 If the amount reported in Schedule K-1 (Form 1065-B), box 2, is a loss, report it on Schedule A (Form 1040), line 28. H and r block on line It is not subject to the passive activity limitations. H and r block on line Repayments Under Claim of Right If you had to repay more than $3,000 that you included in your income in an earlier year because at the time you thought you had an unrestricted right to it, you may be able to deduct the amount you repaid or take a credit against your tax. H and r block on line See Repayments in chapter 12 for more information. H and r block on line Unrecovered Investment in Annuity A retiree who contributed to the cost of an annuity can exclude from income a part of each payment received as a tax-free return of the retiree's investment. H and r block on line If the retiree dies before the entire investment is recovered tax free, any unrecovered investment can be deducted on the retiree's final income tax return. H and r block on line See chapter 10 for more information about the tax treatment of pensions and annuities. H and r block on line Nondeductible Expenses Examples of nondeductible expenses are listed next. H and r block on line The list is followed by discussions of additional nondeductible expenses. H and r block on line List of Nondeductible Expenses Broker's commissions that you paid in connection with your IRA or other investment property. H and r block on line Burial or funeral expenses, including the cost of a cemetery lot. H and r block on line Capital expenses. H and r block on line Fees and licenses, such as car licenses, marriage licenses, and dog tags. H and r block on line Hobby losses, but see Hobby Expenses , earlier. H and r block on line Home repairs, insurance, and rent. H and r block on line Illegal bribes and kickbacks. H and r block on line See Bribes and kickbacks in chapter 11 of Publication 535. H and r block on line Losses from the sale of your home, furniture, personal car, etc. H and r block on line Personal disability insurance premiums. H and r block on line Personal, living, or family expenses. H and r block on line The value of wages never received or lost vacation time. H and r block on line Adoption Expenses You cannot deduct the expenses of adopting a child, but you may be able to take a credit for those expenses. H and r block on line See chapter 37. H and r block on line Campaign Expenses You cannot deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to the office. H and r block on line These include qualification and registration fees for primary elections. H and r block on line Legal fees. H and r block on line   You cannot deduct legal fees paid to defend charges that arise from participation in a political campaign. H and r block on line Check-Writing Fees on Personal Account If you have a personal checking account, you cannot deduct fees charged by the bank for the privilege of writing checks, even if the account pays interest. H and r block on line Club Dues Generally, you cannot deduct the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. H and r block on line This includes business, social, athletic, luncheon, sporting, airline, hotel, golf, and country clubs. H and r block on line You cannot deduct dues paid to an organization if one of its main purposes is to: Conduct entertainment activities for members or their guests, or Provide members or their guests with access to entertainment facilities. H and r block on line Dues paid to airline, hotel, and luncheon clubs are not deductible. H and r block on line Commuting Expenses You cannot deduct commuting expenses (the cost of transportation between your home and your main or regular place of work). H and r block on line If you haul tools, instruments, or other items, in your car to and from work, you can deduct only the additional cost of hauling the items such as the rent on a trailer to carry the items. H and r block on line Fines or Penalties You cannot deduct fines or penalties you pay to a governmental unit for violating a law. H and r block on line This includes an amount paid in settlement of your actual or potential liability for a fine or penalty (civil or criminal). H and r block on line Fines or penalties include parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike. H and r block on line Health Spa Expenses You cannot deduct health spa expenses, even if there is a job requirement to stay in excellent physical condition, such as might be required of a law enforcement officer. H and r block on line Home Security System You cannot deduct the cost of a home security system as a miscellaneous deduction. H and r block on line However, you may be able to claim a deduction for a home security system as a business expense if you have a home office. H and r block on line See Home Office under Unreimbursed Employee Expenses, earlier, and Security System under Deducting Expenses in Publication 587. H and r block on line Investment-Related Seminars You cannot deduct any expenses for attending a convention, seminar, or similar meeting for investment purposes. H and r block on line Life Insurance Premiums You cannot deduct premiums you pay on your life insurance. H and r block on line You may be able to deduct, as alimony, premiums you pay on life insurance policies assigned to your former spouse. H and r block on line See chapter 18 for information on alimony. H and r block on line Lobbying Expenses You generally cannot deduct amounts paid or incurred for lobbying expenses. H and r block on line These include expenses to: Influence legislation, Participate or intervene in any political campaign for, or against, any candidate for public office, Attempt to influence the general public, or segments of the public, about elections, legislative matters, or referendums, or Communicate directly with covered executive branch officials in any attempt to influence the official actions or positions of those officials. H and r block on line Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordination of any of these activities. H and r block on line Dues used for lobbying. H and r block on line   If a tax-exempt organization notifies you that part of the dues or other amounts you pay to the organization are used to pay nondeductible lobbying expenses, you cannot deduct that part. H and r block on line See Lobbying Expenses in Publication 529 for information on exceptions. H and r block on line Lost or Mislaid Cash or Property You cannot deduct a loss based on the mere disappearance of money or property. H and r block on line However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. H and r block on line See chapter 25. H and r block on line Example. H and r block on line A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. H and r block on line The diamond falls from the ring and is never found. H and r block on line The loss of the diamond is a casualty. H and r block on line Lunches with Co-workers You cannot deduct the expenses of lunches with co-workers, except while traveling away from home on business. H and r block on line See chapter 26 for information on deductible expenses while traveling away from home. H and r block on line Meals While Working Late You cannot deduct the cost of meals while working late. H and r block on line However, you may be able to claim a deduction if the cost of meals is a deductible entertainment expense, or if you are traveling away from home. H and r block on line See chapter 26 for information on deductible entertainment expenses and expenses while traveling away from home. H and r block on line Personal Legal Expenses You cannot deduct personal legal expenses such as those for the following. H and r block on line Custody of children. H and r block on line Breach of promise to marry suit. H and r block on line Civil or criminal charges resulting from a personal relationship. H and r block on line Damages for personal injury, except for certain unlawful discrimination and whistleblower claims. H and r block on line Preparation of a title (or defense or perfection of a title). H and r block on line Preparation of a will. H and r block on line Property claims or property settlement in a divorce. H and r block on line You cannot deduct these expenses even if a result of the legal proceeding is the loss of income-producing property. H and r block on line Political Contributions You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. H and r block on line Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible. H and r block on line Professional Accreditation Fees You cannot deduct professional accreditation fees such as the following. H and r block on line Accounting certificate fees paid for the initial right to practice accounting. H and r block on line Bar exam fees and incidental expenses in securing initial admission to the bar. H and r block on line Medical and dental license fees paid to get initial licensing. H and r block on line Professional Reputation You cannot deduct expenses of radio and TV appearances to increase your personal prestige or establish your professional reputation. H and r block on line Relief Fund Contributions You cannot deduct contributions paid to a private plan that pays benefits to any covered employee who cannot work because of any injury or illness not related to the job. H and r block on line Residential Telephone Service You cannot deduct any charge (including taxes) for basic local telephone service for the first telephone line to your residence, even if it is used in a trade or business. H and r block on line Stockholders' Meetings You cannot deduct transportation and other expenses you pay to attend stockholders' meetings of companies in which you own stock but have no other interest. H and r block on line You cannot deduct these expenses even if you are attending the meeting to get information that would be useful in making further investments. H and r block on line Tax-Exempt Income Expenses You cannot deduct expenses to produce tax-exempt income. H and r block on line You cannot deduct interest on a debt incurred or continued to buy or carry  tax-exempt securities. H and r block on line If you have expenses to produce both taxable and tax-exempt income, but you cannot identify the expenses that produce each type of income, you must divide the expenses based on the amount of each type of income to determine the amount that you can deduct. H and r block on line Example. H and r block on line During the year, you received taxable interest of $4,800 and tax-exempt interest of $1,200. H and r block on line In earning this income, you had total expenses of $500 during the year. H and r block on line You cannot identify the amount of each expense item that is for each income item. H and r block on line Therefore, 80% ($4,800/$6,000) of the expense is for the taxable interest and 20% ($1,200/$6,000) is for the tax-exempt interest. H and r block on line You can deduct, subject to the 2% limit, expenses of $400 (80% of $500). H and r block on line Travel Expenses for Another Individual You generally cannot deduct travel expenses you pay or incur for a spouse, dependent, or other individual who accompanies you (or your employee) on business or personal travel unless the spouse, dependent, or other individual is an employee of the taxpayer, the travel is for a bona fide business purpose, and such expenses would otherwise be deductible by the spouse, dependent, or other individual. H and r block on line See chapter 26 for more information on deductible travel expenses. H and r block on line Voluntary Unemployment Benefit Fund Contributions You cannot deduct voluntary unemployment benefit fund contributions you make to a union fund or a private fund. H and r block on line However, you can deduct contributions as taxes if state law requires you to make them to a state unemployment fund that covers you for the loss of wages from unemployment caused by business conditions. H and r block on line Wristwatches You cannot deduct the cost of a wristwatch, even if there is a job requirement that you know the correct time to properly perform your duties. H and r block on line Prev  Up  Next   Home   More Online Publications