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Irs Gov Org

Irs gov org Index A Abortion, Abortion Acupuncture, Acupuncture Adopted child's medical expenses, Adopted child. Irs gov org AGI limitation, Introduction, Community property states. Irs gov org Alcoholism, Alcoholism Ambulances, Ambulance Archer MSAs Health coverage tax credit, How To Take the Credit Medical expenses paid for decedent from, Decedent Artificial limbs, Artificial Limb Artificial teeth, Artificial Teeth Aspirin, Nonprescription Drugs and Medicines Assistance (see Tax help) Assisted living homes, Nursing Home Athletic club dues, Health Club Dues Automobiles (see Cars) B Baby sitting, Baby Sitting, Childcare, and Nursing Services for a Normal, Healthy Baby Bandages, Bandages Basis Medical equipment or property (Worksheet D), Worksheet D. Irs gov org Adjusted Basis of Medical Equipment or Property Sold Birth control pills, Birth Control Pills Body scan, Body Scan Braille books and magazines, Braille Books and Magazines Breast pumps and supplies, Breast Pumps and Supplies Breast reconstruction surgery, Breast Reconstruction Surgery C Calculation of deduction, What If You Are Reimbursed for Medical Expenses You Did Not Deduct? Capital expenses, Capital Expenses Improvements to rented property, Improvements to property rented by a person with a disability. Irs gov org Operation and upkeep, Operation and upkeep. Irs gov org Worksheet A, Capital expense worksheet. Irs gov org Cars, Car Out-of-pocket expenses, Car expenses. Irs gov org Standard medical mileage rates, Car expenses. Irs gov org Child care, Baby Sitting, Childcare, and Nursing Services for a Normal, Healthy Baby Children's medical expenses Adopted child, Adopted child. Irs gov org Dependents, Dependent Chiropractor, Chiropractor Christian Scientist practitioner, Christian Science Practitioner Chronically ill persons, Chronically ill individual. Irs gov org COBRA assistance Recapture of COBRA premium assistance, Worksheet F. Irs gov org Recapture of COBRA Premium Assistance for Higher Income Taxpayers COBRA premium assistance, COBRA Premium Assistance Community property states, Community property states. Irs gov org Computer banks to track medical information, Medical Information Plan Contact lenses, Contact Lenses Controlled substances, Controlled Substances Cosmetic surgery, Cosmetic Surgery Credit (see Health coverage tax credit) Crutches, Crutches D Dancing lessons, Dancing Lessons Decedent's medical expenses, Decedent, What if you pay medical expenses of a deceased spouse or dependent? Deductible amount, How Much of the Expenses Can You Deduct? Deductible expenses, Whose Medical Expenses Can You Include?, X-ray Definition of medical expenses Doctor, What Are Medical Expenses? Physician, What Are Medical Expenses? Dental treatment, Dental Treatment Artificial teeth, Artificial Teeth Teeth whitening, Teeth Whitening Dentures, Artificial Teeth Dependent's medical expenses Adopted child, Adopted child. Irs gov org Multiple support agreement, Support claimed under a multiple support agreement. Irs gov org Qualifying child, Dependent Qualifying relative, Dependent Dependents Disabled dependent care, Disabled Dependent Care Expenses, Dependents with disabilities. Irs gov org Diagnostic devices, Diagnostic Devices Diaper services, Diaper Service Disabilities, persons with Dependent care expenses, Disabled Dependent Care Expenses, Dependents with disabilities. Irs gov org Improvements to rented property, Improvements to property rented by a person with a disability. Irs gov org Special education, Special Education Divorced taxpayers Medical expenses of child, Child of divorced or separated parents. Irs gov org Drug addiction, Drug Addiction Drugs (see Medicines) Dues Health club, Health Club Dues E Education, special, Special Education Electrolysis, Cosmetic Surgery Employer-sponsored health insurance plans, Employer-Sponsored Health Insurance Plan Employment taxes, Employment taxes. Irs gov org Excluded expenses Insurance premiums, Insurance Premiums You Cannot Include Eye surgery, Eye Surgery Eyeglasses, Eyeglasses F Fertility enhancement Eggs, temporary storage of, Fertility Enhancement Fertility, Fertility Enhancement In vitro fertilization, Fertility Enhancement Figuring the deduction, How Do You Figure and Report the Deduction on Your Tax Return? Final return for decedent Medical expenses paid, Decedent Flexible spending account, Flexible Spending Account Food (see Weight-loss programs) Form 1040 Health coverage tax credit, How To Take the Credit Self-employed persons, health insurance costs, Health Insurance Costs for Self-Employed Persons Form 1040, Schedule A Impairment-related work expenses, Where to report. Irs gov org Medical and dental expenses, Introduction, What Tax Form Do You Use? Self-employed persons, health insurance costs, Health Insurance Costs for Self-Employed Persons Form 1040, Schedule C Impairment-related work expenses, Where to report. Irs gov org Form 1040, Schedule C-EZ Impairment-related work expenses, Where to report. Irs gov org Form 1040, Schedule E Impairment-related work expenses, Where to report. Irs gov org Form 1040, Schedule F Impairment-related work expenses, Where to report. Irs gov org Form 1040NR Health coverage tax credit, How To Take the Credit Form 1040X Amended return, What Expenses Can You Include This Year? Deceased taxpayer, What if the decedent's return had been filed and the medical expenses were not included? Form 1099-H Self-employed persons, health insurance costs, Health Insurance Costs for Self-Employed Persons Form 2106 Impairment-related work expenses, Where to report. Irs gov org Form 2106-EZ Impairment-related work expenses, Where to report. Irs gov org Form 2555 Self-employed persons, health insurance costs, Health Insurance Costs for Self-Employed Persons Form 2555-EZ Self-employed persons, health insurance costs, Health Insurance Costs for Self-Employed Persons Form 8453 Health coverage tax credit, How To Take the Credit Form 8885 Health coverage tax credit, How To Take the Credit Self-employed persons, health insurance costs, Health Insurance Costs for Self-Employed Persons Founder's fee (see Lifetime care, advance payments) Free tax services, Free help with your tax return. Irs gov org Funeral expenses, Funeral Expenses Future medical care, Payments for future medical care. Irs gov org , Future Medical Care G Glasses, Eyeglasses Guide dog or other animal, Guide Dog or Other Service Animal H Hair Removal, Cosmetic Surgery Transplants, Cosmetic Surgery Wigs, Wig Health club dues, Health Club Dues Health coverage tax credit, Health Coverage Tax Credit Advanced payments, Monthly HCTC Alternative TAA recipient, Health Coverage Tax Credit Archer MSAs, How To Take the Credit Both spouses eligible, Qualifying Family Member Children of divorced parents, Health Coverage Tax Credit, Qualifying Family Member Eligible coverage month, Eligible Coverage Month Insurance that covers other individuals, Insurance that covers other individuals. Irs gov org Legally separated, Legally separated. Irs gov org Married persons filing separate returns, Qualifying Family Member Monthly HCTC, Monthly HCTC Nonqualified health insurance, Nonqualified Health Insurance Other specified coverage Benefits from the Veterans Administration, Other Specified Coverage Pension Benefit Guaranty Corporation (PBGC) recipient, Health Coverage Tax Credit Qualified health insurance, Qualified Health Insurance Qualifying family member, Qualifying Family Member Reimbursement credit, Monthly HCTC Reporting, How To Take the Credit State-qualified health insurance, State-qualified health insurance. Irs gov org TAA recipient, Health Coverage Tax Credit Yearly HCTC, Yearly HCTC Health Coverage Tax Credit Alternative TAA recipient, Who Can Take This Credit? PBGC pension payee, Who Can Take This Credit? TAA recipient, Who Can Take This Credit? Health institutes, Health Institute Health insurance Credit (see Health coverage tax credit) Employer-sponsored plan, Employer-Sponsored Health Insurance Plan Premiums Deductible, Insurance Premiums Nondeductible, Insurance Premiums You Cannot Include Paid by employer, Premiums paid by your employer. Irs gov org Paid by employer and you, Premiums paid by you and your employer. Irs gov org Paid by you, Premiums paid by you. Irs gov org Prepaid, Prepaid Insurance Premiums Unused sick leave used to pay, Unused Sick Leave Used To Pay Premiums Reimbursements (see Reimbursements) Self-employed persons, Health Insurance Costs for Self-Employed Persons Health maintenance organizations (HMOs), Health Maintenance Organization (HMO) Health reimbursement arrangements (HRAs), Health reimbursement arrangement (HRA). Irs gov org Health savings accounts (HSAs) Payments from, Health Savings Accounts Hearing aids, Hearing Aids Hearing-impaired persons Guide dog or other animal for, Guide Dog or Other Service Animal Help (see Tax help) HMOs (Health maintenance organizations), Health Maintenance Organization (HMO) Home care (see Nursing services) Home improvements (see Capital expenses:) Hospital services, Hospital Services Hotels, Lodging Household help, Household Help HRAs (Health reimbursement arrangements), Health reimbursement arrangement (HRA). Irs gov org I Illegal operations and treatments, Illegal Operations and Treatments Illegal substances, Controlled Substances Impairment-related work expenses, Workers' compensation. Irs gov org , Impairment-related expenses defined. Irs gov org Reporting of, Where to report. Irs gov org Insulin, Nonprescription Drugs and Medicines Insurance (see Health insurance) Intellectually and developmentally disabled persons Mentally retarded, Intellectually and Developmentally Disabled, Special Home for Special homes for, Intellectually and Developmentally Disabled, Special Home for L Laboratory fees, Laboratory Fees Lactation expenses (see Breast pumps and supplies) Laser eye surgery, Eye Surgery Lead-based paint removal, Lead-Based Paint Removal Learning disabilities, Special Education Legal fees, Legal Fees Lessons, dancing and swimming, Dancing Lessons Lifetime care Advance payments for, Lifetime Care—Advance Payments Lodging, Lodging, Trips (see also Trips) Long-term care, Long-Term Care Chronically ill individuals, Chronically ill individual. Irs gov org Maintenance and personal care services, Maintenance and personal care services. Irs gov org Qualified insurance contracts, Qualified Long-Term Care Insurance Contracts Qualified services, Qualified Long-Term Care Services M Maintenance and personal care services, Maintenance and personal care services. Irs gov org Maternity clothes, Maternity Clothes Meals, Meals, Weight-Loss Program (see also Weight-loss programs) Medical conferences, Medical Conferences Medical equipment or property Adjusted basis (Worksheet D), Worksheet D. Irs gov org Adjusted Basis of Medical Equipment or Property Sold Medical expense records, What Tax Form Do You Use? Medical information plans, Medical Information Plan Medical savings accounts (MSAs), Medical Savings Account (MSA) Medicare Medicare A, deductible expense, Medicare A Medicare B, deductible expense, Medicare B Medicare D, deductible expense, Medicare D Medicines, Medicines Imported, Imported medicines and drugs. Irs gov org , Medicines and Drugs From Other Countries Nonprescription drugs and medicines, Nonprescription Drugs and Medicines Missing children, photographs of in IRS publications, Reminders Multiple support agreement, Support claimed under a multiple support agreement. Irs gov org N Nondeductible expenses, What Expenses Are Not Includible?, Weight-Loss Program Nonprescription drugs and medicines, Nonprescription Drugs and Medicines Nursing homes, Nursing Home Nursing services, Nursing Services, Baby Sitting, Childcare, and Nursing Services for a Normal, Healthy Baby Chronically ill individuals, Chronically ill individual. Irs gov org Nutritional supplements Natural medicines, Nutritional Supplements O Operations, Operations Cosmetic surgery, Cosmetic Surgery Eye surgery, Eye Surgery Illegal operations and treatments, Illegal Operations and Treatments Optometrist, Optometrist Optometrist services, Eyeglasses Organ donors, Transplants Osteopath, Osteopath Oxygen, Oxygen P Paint removal, for lead-based, Lead-Based Paint Removal Parking fees and tolls, Car expenses. Irs gov org Personal injury damages, Damages for Personal Injuries Personal use items, Personal Use Items Photographs of missing children in IRS publications, Reminders Physical examination, Physical Examination Physical therapy, Therapy Plastic surgery, Cosmetic Surgery Pregnancy test kit, Pregnancy Test Kit Premiums (see Health insurance) Prepaid insurance premiums, Prepaid Insurance Premiums Prosthesis, Artificial Limb Psychiatric care, Psychiatric Care Psychoanalysis, Psychoanalysis Psychologists, Psychologist Publications (see Tax help) R Radial keratotomy, Eye Surgery Recordkeeping, What Tax Form Do You Use? Rehabilitation facilities, Nursing Home Reimbursements, How Do You Treat Reimbursements?, What If You Are Reimbursed for Medical Expenses You Did Not Deduct? Excess includible in income More than one policy (Worksheet C), More than one policy. Irs gov org One policy (Worksheet B), Worksheet B. Irs gov org Excess Reimbursement Includible in Income When You Have Only One Policy Excess may be taxable (Figure 1), What If Your Insurance Reimbursement Is More Than Your Medical Expenses? Health Reimbursement Arrangement (HRA), Health reimbursement arrangement (HRA). Irs gov org Insurance, Insurance Reimbursement, What If Your Insurance Reimbursement Is More Than Your Medical Expenses? Medical expenses not deducted, What If You Receive Insurance Reimbursement in a Later Year? More than one policy, More than one policy. Irs gov org Received in later year, What If You Are Reimbursed for Medical Expenses You Did Not Deduct? Rental property Improvements to, Improvements to property rented by a person with a disability. Irs gov org Reporting Health coverage tax credit, How To Take the Credit Impairment-related work expenses, Where to report. Irs gov org Medical and dental expenses, What If You Are Reimbursed for Medical Expenses You Did Not Deduct? Medical deduction (see Form 1040, Schedule A) Self-employed persons, health insurance costs, Health Insurance Costs for Self-Employed Persons S Sale of medical equipment or property, Sale of Medical Equipment or Property Adjusted basis (Worksheet D), Worksheet D. Irs gov org Adjusted Basis of Medical Equipment or Property Sold Schedules (see Form 1040) Seeing-eye dogs, Guide Dog or Other Service Animal Self-employed persons Health coverage tax credit, How To Take the Credit Health insurance costs, Health Insurance Costs for Self-Employed Persons Senior housing, Nursing Home Separate returns Community property states, Community property states. Irs gov org Medical and dental expenses, Separate returns. Irs gov org Separated taxpayers Health coverage tax credit, Legally separated. Irs gov org Medical expenses of child, Child of divorced or separated parents. Irs gov org Service animals, Guide Dog or Other Service Animal Sick leave Used to pay health insurance premiums, Unused Sick Leave Used To Pay Premiums Special education, Special Education Spouse's medical expenses, Spouse Deceased spouse, What if you pay medical expenses of a deceased spouse or dependent? Sterilization, Sterilization Stop-smoking programs, Stop-Smoking Programs Surgery (see Operations) Swimming lessons, Dancing Lessons T Tables and figures Medical equipment or property Adjusted basis (Worksheet D), Worksheet D. Irs gov org Adjusted Basis of Medical Equipment or Property Sold Reimbursements, excess includible in income More than one policy (Worksheet C), More than one policy. Irs gov org One policy (Worksheet B), Worksheet B. Irs gov org Excess Reimbursement Includible in Income When You Have Only One Policy Reimbursements, excess may be taxable (Figure 1), What If Your Insurance Reimbursement Is More Than Your Medical Expenses? Tax help, How To Get Tax Help Teeth Artificial, Artificial Teeth Dental treatment, Dental Treatment Whitening, Teeth Whitening Telephone, Telephone Television, Television Therapy, Therapy Transplants, Transplants Travel and transportation expenses, Transportation Car expenses, Car expenses. Irs gov org Includible expenses, You can include:, Transportation expenses you cannot include. Irs gov org Parking fees and tolls, Car expenses. Irs gov org Trips, Trips TTY/TDD information, How To Get Tax Help Tuition, Tuition V Vasectomy, Vasectomy Veterinary fees, Veterinary Fees Vision correction surgery, Eye Surgery Visually impaired persons Guide dog or other animal for, Guide Dog or Other Service Animal Vitamins or minerals, Nutritional Supplements Voluntary Employee's Beneficiary Association (VEBA) Qualified health insurance, Voluntary Employee's Beneficiary Association (VEBA) W Weight-loss programs, Weight-Loss Program, Weight-Loss Program What's new COBRA continuous coverage, What's New Health coverage tax credit, What's New Standard medical mileage rate, What's New Wheelchairs, Wheelchair Wigs, Wig Work expenses Disabled dependent care, Disabled Dependent Care Expenses Impairment-related, Impairment-Related Work Expenses Workers' compensation, Workers' compensation. Irs gov org Worksheets Capital expenses (Worksheet A), Capital expense worksheet. Irs gov org Medical equipment or property Adjusted basis (Worksheet D), Worksheet D. Irs gov org Adjusted Basis of Medical Equipment or Property Sold Reimbursements, excess includible in income More than one policy (Worksheet C), More than one policy. Irs gov org One policy (Worksheet B), Worksheet B. Irs gov org Excess Reimbursement Includible in Income When You Have Only One Policy X X-rays, X-ray Prev  Up     Home   More Online Publications
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Income from Abroad is Taxable

Many United States (U.S.) citizens and resident aliens receive income from foreign sources. There have been recent reports about the interest of the Internal Revenue Service (IRS) in taxpayers with accounts in Liechtenstein. The interest of the IRS, however, extends beyond accounts in Liechtenstein to accounts anywhere in the world. Consequently, the IRS reminds you to report your worldwide income on your U.S. tax return.

If you are a U.S. citizen or resident alien, you must report income from all sources within and outside of the U.S. This is true whether or not you receive a Form W-2 Wage and Tax Statement,  a Form 1099 (Information Return) or the foreign equivalents.    See Publication 525, Taxable and Nontaxable Income for more information.

Additionally, if you are a U.S. citizen or resident alien, the rules for filing income, estate and gift tax returns and for paying estimated tax are generally the same whether you are living in the U.S. or abroad.

Hiding Income Offshore

Not reporting income from foreign sources may be a crime.  The IRS and its international partners are pursuing those who hide income or assets offshore to evade taxes. Specially trained IRS examiners focus on aggressive international tax planning, including the abusive use of entities and structures established in foreign jurisdictions.  The goal is to ensure U.S. citizens and residents are accurately reporting their income and paying the correct tax. 

Foreign Financial Accounts

In addition to reporting your worldwide income, you must also report on your U.S. tax return whether you have any foreign bank or investment accounts.  The Bank Secrecy Act requires you to file a Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), if:

  • You have financial interest in, signature authority, or other authority over one or more accounts in a foreign country, and
  • The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.

More information on foreign financial account reporting requirements is in News Release FS-2007-15, Foreign Financial Accounts Reporting Requirements and Publication 4261, Do You have a Foreign Financial Account?

Consequences for Evading Taxes on Foreign Source Income

You will face serious consequences if the IRS finds you have unreported income or undisclosed foreign financial accounts.  These consequences can include not only the additional taxes, but also substantial penalties, interest, fines and even imprisonment.

Reporting Promoters of Off-Shore Tax Avoidance Schemes

The IRS encourages you to report promoters of off-shore tax avoidance schemes.  Whistleblowers who provide allegations of fraud to the IRS may be eligible for a reward by filing Form 211, Application for Award for Original Information, and following the procedures outlined in Notice 2008-4, Claims Submitted to the IRS Whistleblower Office under Section 7623.

Page Last Reviewed or Updated: 29-Nov-2013

The Irs Gov Org

Irs gov org Publication 529 - Main Content Table of Contents Deductions Subject to the 2% LimitUnreimbursed Employee Expenses Tax Preparation Fees Other Expenses Deductions Not Subject to the 2% LimitList of Deductions Nondeductible ExpensesList of Nondeductible Expenses How To ReportWho can use Form 2106-EZ. Irs gov org Computer used in a home office. Irs gov org Example How To Get Tax HelpLow Income Taxpayer Clinics Deductions Subject to the 2% Limit You can deduct certain expenses as miscellaneous itemized deductions on Schedule A (Form 1040 or Form 1040NR). Irs gov org You can claim the amount of expenses that is more than 2% of your adjusted gross income. Irs gov org You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. Irs gov org Your adjusted gross income is the amount on Form 1040, line 38, or Form 1040NR, line 37. Irs gov org Generally, you apply the 2% limit after you apply any other deduction limit. Irs gov org For example, you apply the 50% (or 80%) limit on business-related meals and entertainment (discussed later under Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging ) before you apply the 2% limit. Irs gov org Deductions subject to the 2% limit are discussed in the following three categories. Irs gov org Unreimbursed employee expenses (Schedule A (Form 1040), line 21 or Schedule A (Form 1040NR), line 7). Irs gov org Tax preparation fees (Schedule A (Form 1040), line 22 or Schedule A (Form 1040NR), line 8). Irs gov org Other expenses (Schedule A (Form 1040), line 23 or Schedule A (Form 1040NR), line 9). Irs gov org Unreimbursed Employee Expenses Generally, the following expenses are deducted on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. Irs gov org You can deduct only 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. Irs gov org An expense is ordinary if it is common and accepted in your trade, business, or profession. Irs gov org An expense is necessary if it is appropriate and helpful to your business. Irs gov org An expense does not have to be required to be considered necessary. Irs gov org You may be able to deduct the following items as unreimbursed employee expenses. Irs gov org Business bad debt of an employee. Irs gov org Business liability insurance premiums. Irs gov org Damages paid to a former employer for breach of an employment contract. Irs gov org Depreciation on a computer your employer requires you to use in your work. Irs gov org Dues to a chamber of commerce if membership helps you do your job. Irs gov org Dues to professional societies. Irs gov org Educator expenses. Irs gov org Home office or part of your home used regularly and exclusively in your work. Irs gov org Job search expenses in your present occupation. Irs gov org Laboratory breakage fees. Irs gov org Legal fees related to your job. Irs gov org Licenses and regulatory fees. Irs gov org Malpractice insurance premiums. Irs gov org Medical examinations required by an employer. Irs gov org Occupational taxes. Irs gov org Passport for a business trip. Irs gov org Repayment of an income aid payment received under an employer's plan. Irs gov org Research expenses of a college professor. Irs gov org Rural mail carriers' vehicle expenses. Irs gov org Subscriptions to professional journals and trade magazines related to your work. Irs gov org Tools and supplies used in your work. Irs gov org Travel, transportation, meals, entertainment, gifts, and local lodging related to your work. Irs gov org Union dues and expenses. Irs gov org Work clothes and uniforms if required and not suitable for everyday use. Irs gov org Work-related education. Irs gov org Business Bad Debt A business bad debt is a loss from a debt created or acquired in your trade or business. Irs gov org Any other worthless debt is a business bad debt only if there is a very close relationship between the debt and your trade or business when the debt becomes worthless. Irs gov org A debt has a very close relationship to your trade or business of being an employee if your main motive for incurring the debt is a business reason. Irs gov org Example. Irs gov org You make a bona fide loan to the corporation you work for. Irs gov org It fails to pay you back. Irs gov org You had to make the loan in order to keep your job. Irs gov org You have a business bad debt as an employee. Irs gov org More information. Irs gov org   For more information on business bad debts, see chapter 10 in Publication 535. Irs gov org For information on nonbusiness bad debts, see chapter 4 in Publication 550, Investment Income and Expenses. Irs gov org Business Liability Insurance You can deduct insurance premiums you paid for protection against personal liability for wrongful acts on the job. Irs gov org Damages for Breach of Employment Contract If you break an employment contract, you can deduct damages you pay your former employer if the damages are attributable to the pay you received from that employer. Irs gov org 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. Irs gov org For the convenience of your employer. Irs gov org   This means that your use of the computer is for a substantial business reason of your employer. Irs gov org You must consider all facts in making this determination. Irs gov org Use of your computer during your regular working hours to carry on your employer's business is generally for the convenience of your employer. Irs gov org Required as a condition of your employment. Irs gov org   This means that you cannot properly perform your duties without the computer. Irs gov org Whether you can properly perform your duties without it depends on all the facts and circumstances. Irs gov org It is not necessary that your employer explicitly requires you to use your computer. Irs gov org But neither is it enough that your employer merely states that your use of the item is a condition of your employment. Irs gov org Example. Irs gov org You are an engineer with an engineering firm. Irs gov org You occasionally take work home at night rather than work late at the office. Irs gov org You own and use a computer that is similar to the one you use at the office to complete your work at home. Irs gov org Since your use of the computer is not for the convenience of your employer and is not required as a condition of your employment, you cannot claim a depreciation deduction for it. Irs gov org Which depreciation method to use. Irs gov org   The depreciation method you use depends on whether you meet the more-than-50%-use test. Irs gov org More-than-50%-use test met. Irs gov org   You meet this test if you use the computer more than 50% in your work. Irs gov org If you meet this test, you can claim accelerated depreciation under the General Depreciation System (GDS). Irs gov org In addition, you may be able to take the section 179 deduction for the year you place the item in service. Irs gov org More-than-50%-use test not met. Irs gov org   If you do not meet the more-than-50%-use test, you are limited to the straight line method of depreciation under the Alternative Depreciation System (ADS). Irs gov org You also cannot claim the section 179 deduction. Irs gov org (But if you use your computer in a home office, see the exception below. Irs gov org ) Investment use. Irs gov org   Your use of a computer in connection with investments (described later under Other Expenses ) does not count as use in your work. Irs gov org However, you can combine your investment use with your work use in figuring your depreciation deduction. Irs gov org Exception for computer used in a home office. Irs gov org   The more-than-50%-use test does not apply to a computer used only in a part of your home that meets the requirements described later under Home Office . Irs gov org You can claim accelerated depreciation using GDS for a computer used in a qualifying home office, even if you do not use it more than 50% in your work. Irs gov org You also may be able to take a section 179 deduction for the year you place the computer in service. Irs gov org See Computer used in a home office under How To Report, later. Irs gov org More information. Irs gov org   For more information on depreciation and the section 179 deduction for computers and other items used in a home office, see Business Furniture and Equipment in Publication 587. Irs gov org Publication 946 has detailed information about the section 179 deduction and depreciation deductions using GDS and ADS. Irs gov org Reporting your depreciation deduction. Irs gov org    See How To Report, later, for information about reporting a deduction for depreciation. Irs gov org You must keep records to prove your percentage of business and investment use. Irs gov org 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. Irs gov org Similar organizations include: Boards of trade, Business leagues, Civic or public service organizations, Real estate boards, and Trade associations. Irs gov org Lobbying and political activities. Irs gov org    You may not be able to deduct that part of your dues that is for certain lobbying and political activities. Irs gov org See Lobbying Expenses under Nondeductible Expenses, later. Irs gov org 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. Irs gov org If you file Form 1040A, you can deduct these expenses on line 16. Irs gov org If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. Irs gov org However, neither spouse can deduct more than $250 of his or her qualified expenses. Irs gov org Eligible educator. Irs gov org   An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in school for at least 900 hours during a school year. Irs gov org Qualified expenses. Irs gov org   Qualified expenses include ordinary and necessary expenses paid in connection with books, supplies, equipment (including computer equipment, software, and services), and other materials used in the classroom. Irs gov org An ordinary expense is one that is common and accepted in your educational field. Irs gov org A necessary expense is one that is helpful and appropriate for your profession as an educator. Irs gov org An expense does not have to be required to be considered necessary. Irs gov org   Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. Irs gov org You must reduce your qualified expenses by the following amounts. Irs gov org Excludable U. Irs gov org S. Irs gov org series EE and I savings bond interest from Form 8815. Irs gov org Nontaxable qualified state tuition program earnings. Irs gov org Nontaxable earnings from Coverdell education savings accounts. Irs gov org Any reimbursements you received for those expenses that were not reported to you on your Form W-2, box 1. Irs gov org Educator expenses over limit. Irs gov org   If you were an educator in 2013 and you had qualified expenses that you cannot take as an adjustment to gross income, you can deduct the rest as an itemized deduction subject to the 2% limit. Irs gov org 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. Irs gov org 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. Irs gov org The regular and exclusive business use must be for the convenience of your employer and not just appropriate and helpful in your job. Irs gov org Principal place of business. Irs gov org   If you have more than one place of business, the business part of your home is your principal place of business if: You use it regularly and exclusively for administrative or management activities of your trade or business, and You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Irs gov org   Otherwise, the location of your principal place of business generally depends on the relative importance of the activities performed at each location and the time spent at each location. Irs gov org You should keep records that will give the information needed to figure the deduction according to these rules. Irs gov org Also keep canceled checks, substitute checks, or account statements and receipts of the expenses paid to prove the deductions you claim. Irs gov org More information. Irs gov org   See Publication 587 for more detailed information and a worksheet for figuring the deduction. Irs gov org 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. Irs gov org 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. Irs gov org Employment and outplacement agency fees. Irs gov org    You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation. Irs gov org Employer pays you back. Irs gov org   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. Irs gov org See Recoveries in Publication 525. Irs gov org Employer pays the employment agency. Irs gov org   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. Irs gov org Résumé. Irs gov org   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. Irs gov org Travel and transportation expenses. Irs gov org   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. Irs gov org You can deduct the travel expenses if the trip is primarily to look for a new job. Irs gov org 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. Irs gov org   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. Irs gov org    You can choose to use the standard mileage rate to figure your car expenses. Irs gov org The 2013 rate for business use of a vehicle is 56½ cents per mile. Irs gov org See Publication 463 for more information on travel and car expenses. Irs gov org Legal Fees You can deduct legal fees related to doing or keeping your job. Irs gov org 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. Irs gov org 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. Irs gov org 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. Irs gov org 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. Irs gov org 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. Irs gov org Research Expenses of a College Professor If you are a college professor, you can deduct your research expenses, including travel expenses, for teaching, lecturing, or writing and publishing on subjects that relate directly to your teaching duties. Irs gov org 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. Irs gov org However, you cannot deduct the cost of travel as a form of education. Irs gov org Rural Mail Carriers' Vehicle Expenses If your expenses to use a vehicle in performing services as a rural mail carrier are more than the amount of your reimbursements, you can deduct the unreimbursed expenses. Irs gov org See chapter 4 of Publication 463 for more information. Irs gov org 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. Irs gov org You can depreciate the cost of tools that have a useful life substantially beyond the tax year. Irs gov org For more information about depreciation, see Publication 946. Irs gov org Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging If you are an employee and have ordinary and necessary business-related expenses for travel away from home, local transportation, entertainment, and gifts, you may be able to deduct these expenses. Irs gov org Generally, you must file Form 2106 or Form 2106-EZ to claim these expenses. Irs gov org Travel expenses. Irs gov org   Travel expenses are those incurred while traveling away from home for your employer. Irs gov org You can deduct travel expenses paid or incurred in connection with a temporary work assignment. Irs gov org Generally, you cannot deduct travel expenses paid or incurred in connection with an indefinite work assignment. Irs gov org   Travel expenses may include: The cost of getting to and from your business destination (air, rail, bus, car, etc. Irs gov org ), Meals and lodging while away from home, Taxi fares, Baggage charges, and Cleaning and laundry expenses. Irs gov org   Travel expenses are discussed more fully in chapter 1 of Publication 463. Irs gov org Temporary work assignment. Irs gov org    If your assignment or job away from home in a single location is realistically expected to last (and does in fact last) for 1 year or less, it is temporary, unless there are facts and circumstances that indicate it is not. Irs gov org Indefinite work assignment. Irs gov org   If your assignment or job away from home in a single location is realistically expected to last for more than 1 year, it is indefinite, whether or not it actually lasts for more than 1 year. Irs gov org If your assignment or job away from home in a single location is realistically expected to last for 1 year or less, but at some later date it is realistically expected to exceed 1 year, it will be treated as temporary (in the absence of facts and circumstances indicating otherwise) until the date that your realistic expectation changes, and it will be treated as indefinite after that date. Irs gov org Federal crime investigation and prosecution. Irs gov org   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule for deducting temporary travel expenses. Irs gov org This means that you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year. Irs gov org   To qualify, the Attorney General must certify that you are traveling: For the Federal Government, In a temporary duty status, and To investigate, prosecute, or provide support services for the investigation or prosecution of a federal crime. Irs gov org Armed Forces reservists traveling more than 100 miles from home. Irs gov org   If you are a member of a reserve component of the Armed Forces of the United States and you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you can deduct some of your travel expenses as an adjustment to gross income rather than as a miscellaneous itemized deduction. Irs gov org The amount of expenses you can deduct as an adjustment to gross income is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Irs gov org The balance, if any, is reported on Schedule A. Irs gov org   You are a member of a reserve component of the Armed Forces of the United States if you are in the Army, Naval, Marine Corps, Air Force, Coast Guard Reserve, the Army National Guard of the United States, the Air National Guard of the United States, or the Reserve Corps of the Public Health Service. Irs gov org   For more information on travel expenses, see Publication 463. Irs gov org Local transportation expenses. Irs gov org   Local transportation expenses are the expenses of getting from one workplace to another when you are not traveling away from home. Irs gov org They include the cost of transportation by air, rail, bus, taxi, and the cost of using your car. Irs gov org   You can choose to use the standard mileage rate to figure your car expenses. Irs gov org The 2013 rate for business use of a vehicle is 56½ cents per mile. Irs gov org    In general, the costs of commuting between your residence and your place of business are nondeductible. Irs gov org Work at two places in a day. Irs gov org   If you work at two places in a day, whether or not for the same employer, you can generally deduct the expenses of getting from one workplace to the other. Irs gov org Temporary work location. Irs gov org   You can deduct expenses incurred in going between your home and a temporary work location if at least one of the following applies. Irs gov org The work location is outside the metropolitan area where you live and normally work. Irs gov org You have at least one regular work location (other than your home) for the same trade or business. Irs gov org (If this applies, the distance between your home and the temporary work location does not matter. Irs gov org )   For this purpose, a work location is generally considered temporary if your work there is realistically expected to last (and does in fact last) for 1 year or less. Irs gov org It is not temporary if your work there is realistically expected to last for more than 1 year, even if it actually lasts for 1 year or less. Irs gov org If your work there initially is realistically expected to last for 1 year or less, but later is realistically expected to last for more than 1 year, the work location is generally considered temporary until the date your realistic expectation changes and not temporary after that date. Irs gov org For more information, see chapter 1 of Publication 463. Irs gov org Home office. Irs gov org   You can deduct expenses incurred in going between your home and a workplace if your home is your principal place of business for the same trade or business. Irs gov org (In this situation, whether the other workplace is temporary or regular and its distance from your home do not matter. Irs gov org ) See Home Office , earlier, for a discussion on the use of your home as your principal place of business. Irs gov org Meals and entertainment. Irs gov org   Generally, you can deduct entertainment expenses (including entertainment-related meals) only if they are directly related to the active conduct of your trade or business. Irs gov org However, the expense only needs to be associated with the active conduct of your trade or business if it directly precedes or follows a substantial and bona fide business-related discussion. Irs gov org   You can deduct only 50% of your business-related meal and entertainment expenses unless the expenses meet certain exceptions. Irs gov org You apply this 50% limit before you apply the 2%-of-adjusted-gross-income limit. Irs gov org Meals when subject to “hours of service” limits. Irs gov org   You can deduct 80% of your business-related meal expenses if you consume the meals during or incident to any period subject to the Department of Transportation's “hours of service” limits. Irs gov org You apply this 80% limit before you apply the 2%-of-adjusted-gross-income limit. Irs gov org Gift expenses. Irs gov org   You can generally deduct up to $25 of business gifts you give to any one individual during the year. Irs gov org The following items do not count toward the $25 limit. Irs gov org Identical, widely distributed items costing $4 or less that have your name clearly and permanently imprinted. Irs gov org Signs, racks, and promotional materials to be displayed on the business premises of the recipient. Irs gov org Local lodging. Irs gov org   If your employer provides or requires you to obtain lodging while you are not traveling away from home, you can deduct the cost of the lodging if it is: on a temporary basis, necessary for you to participate in or be available for a business meeting or employer function, and the costs are ordinary and necessary, but not lavish or extravagant. Irs gov org   If your employer provides the lodging or reimburses you for the cost of the lodging, you can deduct the cost only if the value or the reimbursement is included in your gross income because it is reported as wages on your Form W-2. Irs gov org Additional information. Irs gov org    See Publication 463 for more information on travel, transportation, meal, entertainment, and gift expenses, and reimbursements for these expenses. Irs gov org Union Dues and Expenses You can deduct dues and initiation fees you pay for union membership. Irs gov org You can also deduct assessments for benefit payments to unemployed union members. Irs gov org However, you cannot deduct the part of the assessments or contributions that provides funds for the payment of sick, accident, or death benefits. Irs gov org Also, you cannot deduct contributions to a pension fund even if the union requires you to make the contributions. Irs gov org You may not be able to deduct amounts you pay to the union that are related to certain lobbying and political activities. Irs gov org See Lobbying Expenses under Nondeductible Expenses, later. Irs gov org Work Clothes and Uniforms You can deduct the cost and upkeep of work clothes if the following two requirements are met. Irs gov org You must wear them as a condition of your employment. Irs gov org The clothes are not suitable for everyday wear. Irs gov org It is not enough that you wear distinctive clothing. Irs gov org The clothing must be specifically required by your employer. Irs gov org Nor is it enough that you do not, in fact, wear your work clothes away from work. Irs gov org The clothing must not be suitable for taking the place of your regular clothing. Irs gov org 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. Irs gov org ). Irs gov org Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear. Irs gov org 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. Irs gov org Similarly, the costs of buying and maintaining blue work clothes worn by a welder at the request of a foreman are not deductible. Irs gov org Protective clothing. Irs gov org   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. Irs gov org   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. Irs gov org Military uniforms. Irs gov org   You generally cannot deduct the cost of your uniforms if you are on full-time active duty in the armed forces. Irs gov org 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. Irs gov org In figuring the deduction, you must reduce the cost by any nontaxable allowance you receive for these expenses. Irs gov org   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. Irs gov org   If you are a student at an armed forces academy, you cannot deduct the cost of your uniforms if they replace regular clothing. Irs gov org However, you can deduct the cost of insignia, shoulder boards, and related items. Irs gov org    You can deduct the cost of your uniforms if you are a civilian faculty or staff member of a military school. Irs gov org Work-Related Education You can deduct expenses you have for education, even if the education may lead to a degree, if the education meets at least one of the following two tests. Irs gov org It maintains or improves skills required in your present work. Irs gov org It is required by your employer or the law to keep your salary, status, or job, and the requirement serves a business purpose of your employer. Irs gov org You cannot deduct expenses you have for education, even though one or both of the preceding tests are met, if the education: Is needed to meet the minimum educational requirements to qualify you in your trade or business, or Is part of a program of study that will lead to qualifying you in a new trade or business. Irs gov org If your education qualifies, you can deduct expenses for tuition, books, supplies, laboratory fees, and similar items, and certain transportation costs. Irs gov org If the education qualifies you for a new trade or business, you cannot deduct the educational expenses even if you do not intend to enter that trade or business. Irs gov org Travel as education. Irs gov org   You cannot deduct the cost of travel that in itself constitutes a form of education. Irs gov org For example, a French teacher who travels to France to maintain general familiarity with the French language and culture cannot deduct the cost of the trip as an educational expense. Irs gov org More information. Irs gov org    See Publication 970, Tax Benefits for Education, for a complete discussion of the deduction for work-related education expenses. Irs gov org Education Expenses During Unemployment If you stop working for a year or less in order to get education in order to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. Irs gov org Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. Irs gov org Tax Preparation Fees You can usually deduct tax preparation fees on the return for the year in which you pay them. Irs gov org Thus, on your 2013 return, you can deduct fees paid in 2013 for preparing your 2012 return. Irs gov org These fees include the cost of tax preparation software programs and tax publications. Irs gov org They also include any fee you paid for electronic filing of your return. Irs gov org See Tax preparation fees under How To Report, later. Irs gov org Other Expenses You can deduct certain other expenses as miscellaneous itemized deductions subject to the 2%-of-adjusted-gross-income limit. Irs gov org On Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9, you can deduct the ordinary and necessary 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. Irs gov org You can deduct expenses you pay for the purposes in (1) and (2) above only if they are reasonable and closely related to these purposes. Irs gov org These other expenses include the following items. Irs gov org Appraisal fees for a casualty loss or charitable contribution. Irs gov org Casualty and theft losses from property used in performing services as an employee. Irs gov org Clerical help and office rent in caring for investments. Irs gov org Depreciation on home computers used for investments. Irs gov org Excess deductions (including administrative expenses) allowed a beneficiary on termination of an estate or trust. Irs gov org Fees to collect interest and dividends. Irs gov org Hobby expenses, but generally not more than hobby income. Irs gov org Indirect miscellaneous deductions from pass-through entities. Irs gov org Investment fees and expenses. Irs gov org Legal fees related to producing or collecting taxable income or getting tax advice. Irs gov org Loss on deposits in an insolvent or bankrupt financial institution. Irs gov org Loss on traditional IRAs or Roth IRAs, when all amounts have been distributed to you. Irs gov org Repayments of income. Irs gov org Repayments of social security benefits. Irs gov org Safe deposit box rental, except for storing jewelry and other personal effects. Irs gov org Service charges on dividend reinvestment plans. Irs gov org Tax advice fees. Irs gov org Trustee's fees for your IRA, if separately billed and paid. Irs gov org If the expenses you pay produce income that is only partially taxable, see Tax-Exempt Income Expenses, later, under Nondeductible Expenses. Irs gov org Appraisal Fees You can deduct appraisal fees if you pay them to figure a casualty loss or the fair market value of donated property. Irs gov org 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. Irs gov org First report the loss in Section B of Form 4684, Casualties and Thefts. Irs gov org You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. Irs gov org 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. Irs gov org For more information on casualty and theft losses, see Publication 547, Casualties, Disasters, and Thefts. Irs gov org 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. Irs gov org 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. Irs gov org The fees are deductible on the return for the year in which you paid them. Irs gov org For example, fees charged to payments made in 2013 can be claimed on the 2013 tax return. Irs gov org 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). Irs gov org You generally must depreciate the computer using the straight line method over the Alternative Depreciation System (ADS) recovery period. Irs gov org But if you work as an employee and also use the computer in that work, see Depreciation on Computers under Unreimbursed Employee Expenses, earlier. Irs gov org For more information on depreciation, see Publication 946. Irs gov org 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. Irs gov org Do not include deductions for the estate's personal exemption and charitable contributions when figuring the estate's total deductions. Irs gov org 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. Irs gov org For more information, see Termination of Estate in Publication 559, Survivors, Executors, and Administrators. Irs gov org 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. Irs gov org But you cannot deduct a fee you pay to a broker to buy investment property, such as stocks or bonds. Irs gov org You must add the fee to the cost of the property. Irs gov org You cannot deduct the fee you pay to a broker to sell securities. Irs gov org You can use the fee only to figure gain or loss from the sale. Irs gov org See the instructions for Schedule D (Form 1040) for information on how to report the fee. Irs gov org Hobby Expenses You can generally deduct hobby expenses, but only up to the amount of hobby income. Irs gov org A hobby is not a business because it is not carried on to make a profit. Irs gov org See Not-for-Profit Activities in chapter 1 of Publication 535. Irs gov org Indirect Deductions of Pass-Through Entities Pass-through entities include partnerships, S corporations, and mutual funds that are not publicly offered. Irs gov org Deductions of pass-through entities are passed through to the partners or shareholders. Irs gov org The partners or shareholders can deduct their share of passed-through deductions for investment expenses as miscellaneous itemized deductions subject to the 2% limit. Irs gov org Example. Irs gov org You are a member of an investment club that is formed solely to invest in securities. Irs gov org The club is treated as a partnership. Irs gov org The partnership's income is solely from taxable dividends, interest, and gains from sales of securities. Irs gov org In this case, you can deduct your share of the partnership's operating expenses as miscellaneous itemized deductions subject to the 2% limit. Irs gov org 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. Irs gov org Publicly offered mutual funds. Irs gov org   Publicly offered mutual funds do not pass deductions for investment expenses through to shareholders. Irs gov org 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. Irs gov org   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). Irs gov org This net figure is the amount you report on your return as income. Irs gov org You cannot further deduct investment expenses related to publicly offered mutual funds because they are already included as part of the net income amount. Irs gov org Information returns. Irs gov org   You should receive information returns from pass-through entities. Irs gov org Partnerships and S corporations. Irs gov org   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. Irs gov org Nonpublicly offered mutual funds. Irs gov org   These funds will send you a Form 1099-DIV, or a substitute form, showing your share of gross income and investment expenses. Irs gov org You can claim the expenses only as a miscellaneous itemized deduction subject to the 2% limit. Irs gov org 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. Irs gov org 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. Irs gov org 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. Irs gov org 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. Irs gov org You deduct expenses of resolving nonbusiness tax issues on Schedule A (Form 1040 or Form 1040NR). Irs gov org See Tax Preparation Fees, earlier. Irs gov org Unlawful discrimination claims. Irs gov org   You may be able to deduct, as an adjustment to income on Form 1040, line 36, or Form 1040NR, line 35, rather than as a miscellaneous itemized deduction, attorney fees and court costs for actions settled or decided after October 22, 2004, involving a claim of unlawful discrimination, a claim against the U. Irs gov org S. Irs gov org Government, or a claim made under section 1862(b)(3)(A) of the Social Security Act. Irs gov org However, the amount you can deduct on Form 1040, line 36, or Form 1040NR, line 35, is limited to the amount of the judgment or settlement you are including in income for the tax year. Irs gov org See Publication 525 for more information. Irs gov org Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. Irs gov org If you can reasonably estimate the amount of your loss on money you have on deposit in a financial institution that becomes insolvent or bankrupt, you can generally choose to deduct it in the current year even though its exact amount has not been finally determined. Irs gov org If elected, the casualty loss is subject to certain deduction limitations. Irs gov org The election is made on Form 4684. Irs gov org Once you make this choice, you cannot change it without IRS approval. Irs gov org If none of the deposit is federally insured, you can deduct the loss in either of the following ways. Irs gov org As an ordinary loss (as a miscellaneous itemized deduction subject to the 2% limit). Irs gov org Write the name of the financial institution and “Insolvent Financial Institution” beside the amount on Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9. Irs gov org This deduction is limited to $20,000 ($10,000 if you are married filing separately) for each financial institution, reduced by any expected state insurance proceeds. Irs gov org As a casualty loss. Irs gov org Report it on Form 4684 first and then on Schedule A (Form 1040). Irs gov org See Publication 547 for details. Irs gov org As a nonbusiness bad debt. Irs gov org Report it on Schedule D (Form 1040). Irs gov org If any part of the deposit is federally insured, you can deduct the loss only as a casualty loss. Irs gov org Exception. Irs gov org   You cannot make this choice if you are a 1%-or-more-owner or an officer of the financial institution, or are related to such owner or officer. Irs gov org For a definition of “related,” see Deposit in Insolvent or Bankrupt Financial Institution in chapter 4 of Publication 550. Irs gov org Actual loss different from estimated loss. Irs gov org   If you make this choice and your actual loss is less than your estimated loss, you must include the excess in income. Irs gov org See Recoveries in Publication 525. Irs gov org If your actual loss is more than your estimated loss, treat the excess loss as explained under Choice not made, next. Irs gov org Choice not made. Irs gov org   If you do not make this choice (or if you have an excess actual loss after choosing to deduct your estimated loss), treat your loss (or excess loss) as a nonbusiness bad debt (deductible as a short-term capital loss) in the year its amount is finally determined. Irs gov org See Nonbusiness Bad Debts in chapter 4 of Publication 550. Irs gov org Loss on IRA If you have a loss on your traditional IRA (or Roth IRA) investment, you can deduct the loss as a miscellaneous itemized deduction subject to the 2% limit, but only when all the amounts in all your traditional IRA (or Roth IRA) accounts have been distributed to you and the total distributions are less than your unrecovered basis. Irs gov org For more information, see Publication 590, Individual Retirement Arrangements (IRAs). Irs gov org 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. Irs gov org If the amount you had to repay was ordinary income of $3,000 or less, the deduction is subject to the 2% limit. Irs gov org If it was more than $3,000, see Repayments Under Claim of Right under Deductions Not Subject to the 2% Limit, later. Irs gov org Repayments of Social Security Benefits If the total of the amounts in box 5 (net benefits for 2013) of all your Forms SSA-1099, Social Security Benefit Statement, and Forms RRB-1099, Payments By the Railroad Retirement Board, is a negative figure (a figure in parentheses), you may be able to take a miscellaneous itemized deduction subject to the 2% limit. Irs gov org The amount you can deduct is the part of the negative figure that represents an amount you included in gross income in an earlier year. Irs gov org The amount in box 5 of Form SSA-1099 or RRB-1099 is the net amount of your benefits for the year. Irs gov org It will be a negative figure if the amount of benefits you repaid in 2013 (box 4) is more than the gross amount of benefits paid to you in 2013 (box 3). Irs gov org If the deduction is more than $3,000, you will have to use a special computation to figure your tax. Irs gov org See Publication 915, Social Security and Equivalent Railroad Retirement Benefits, for additional information. Irs gov org 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. Irs gov org You cannot deduct the rent if you use the box only for jewelry, other personal items, or tax-exempt securities. Irs gov org Service Charges on Dividend Reinvestment Plans You can deduct service charges you pay as a subscriber in a dividend reinvestment plan. Irs gov org 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. Irs gov org Trustee's Administrative Fees for IRA Trustee's administrative fees that are billed separately and paid by you in connection with your IRA are deductible (if they are ordinary and necessary) as a miscellaneous itemized deduction subject to the 2% limit. Irs gov org Deductions Not Subject to the 2% Limit You can deduct the items listed below as miscellaneous itemized deductions. Irs gov org They are not subject to the 2% limit. Irs gov org Report these items on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14. Irs gov org List of Deductions Amortizable premium on taxable bonds. Irs gov org Casualty and theft losses from income-producing property. Irs gov org Federal estate tax on income in respect of a decedent. Irs gov org Gambling losses up to the amount of gambling winnings. Irs gov org Impairment-related work expenses of persons with disabilities. Irs gov org Loss from other activities from Schedule K-1 (Form 1065-B), box 2. Irs gov org Losses from Ponzi-type investment schemes. Irs gov org Repayments of more than $3,000 under a claim of right. Irs gov org Unrecovered investment in an annuity. Irs gov org 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. Irs gov org You can elect to amortize the premium on taxable bonds. Irs gov org The amortization of the premium is generally an offset to interest income on the bond rather than a separate deduction item. Irs gov org Pre-1998 election to amortize bond premium. Irs gov org   Generally, if you first elected to amortize bond premium before 1998, the above treatment of the premium does not apply to bonds you acquired before 1988. Irs gov org Bonds acquired after October 22, 1986, and before 1988. Irs gov org   The amortization of the premium on these bonds is investment interest expense subject to the investment interest limit, unless you chose to treat it as an offset to interest income on the bond. Irs gov org Bonds acquired before October 23, 1986. Irs gov org   The amortization of the premium on these bonds is a miscellaneous itemized deduction not subject to the 2% limit. Irs gov org Deduction for excess premium. Irs gov org   On certain bonds (such as bonds that pay a variable rate of interest or that provide for an interest-free period), the amount of bond premium allocable to a period may exceed the amount of stated interest allocable to the period. Irs gov org If this occurs, treat the excess as a miscellaneous itemized deduction that is not subject to the 2% limit. Irs gov org However, the amount deductible is limited to the amount by which your total interest inclusions on the bond in prior periods exceed the total amount you treated as a bond premium deduction on the bond in prior periods. Irs gov org If any of the excess bond premium cannot be deducted because of the limit, this amount is carried forward to the next period and is treated as bond premium allocable to that period. Irs gov org    Pre-1998 choice to amortize bond premium. Irs gov org If you made the choice to amortize the premium on taxable bonds before 1998, you can deduct the bond premium amortization that is more than your interest income only for bonds acquired during 1998 and later years. Irs gov org More information. Irs gov org    For more information on bond premium, see Bond Premium Amortization in chapter 3 of Publication 550. Irs gov org 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). Irs gov org First report the loss in Section B of Form 4684. Irs gov org You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. Irs gov org 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. Irs gov org For more information on casualty and theft losses, see Publication 547. Irs gov org 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. Irs gov org 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. Irs gov org See Publication 559 for information about figuring the amount of this deduction. Irs gov org 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. Irs gov org You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. Irs gov org You cannot deduct gambling losses that are more than your winnings. Irs gov org Generally, nonresident aliens cannot deduct gambling losses on Schedule A (Form 1040NR). Irs gov org You cannot reduce your gambling winnings by your gambling losses and report the difference. Irs gov org 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. Irs gov org Therefore, your records should show your winnings separately from your losses. Irs gov org Diary of winnings and losses. Irs gov org You must keep an accurate diary or similar record of your losses and winnings. Irs gov org Your diary should contain at least the following information. Irs gov org The date and type of your specific wager or wagering activity. Irs gov org The name and address or location of the gambling establishment. Irs gov org The names of other persons present with you at the gambling establishment. Irs gov org The amount(s) you won or lost. Irs gov org Proof of winnings and losses. Irs gov org   In addition to your diary, you should also have other documentation. Irs gov org You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment. Irs gov org   For specific wagering transactions, you can use the following items to support your winnings and losses. Irs gov org    These recordkeeping suggestions are intended as general guidelines to help you establish your winnings and losses. Irs gov org They are not all-inclusive. Irs gov org Your tax liability depends on your particular facts and circumstances. Irs gov org Keno. Irs gov org   Copies of the keno tickets you purchased that were validated by the gambling establishment, copies of your casino credit records, and copies of your casino check cashing records. Irs gov org Slot machines. Irs gov org   A record of the machine number and all winnings by date and time the machine was played. Irs gov org Table games (twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc. Irs gov org ). Irs gov org   The number of the table at which you were playing. Irs gov org Casino credit card data indicating whether the credit was issued in the pit or at the cashier's cage. Irs gov org Bingo. Irs gov org   A record of the number of games played, cost of tickets purchased, and amounts collected on winning tickets. Irs gov org Supplemental records include any receipts from the casino, parlor, etc. Irs gov org Racing (horse, harness, dog, etc. Irs gov org ). Irs gov org   A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets. Irs gov org Supplemental records include unredeemed tickets and payment records from the racetrack. Irs gov org Lotteries. Irs gov org   A record of ticket purchases, dates, winnings, and losses. Irs gov org Supplemental records include unredeemed tickets, payment slips, and winnings statements. Irs gov org 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. Irs gov org Impairment-related work expenses are ordinary and necessary business expenses for attendant care services at your place of work and other expenses in connection with your place of work that are necessary for you to be able to work. Irs gov org Example. Irs gov org You are blind. Irs gov org You must use a reader to do your work. Irs gov org You use the reader both during your regular working hours at your place of work and outside your regular working hours away from your place of work. Irs gov org The reader's services are only for your work. Irs gov org You can deduct your expenses for the reader as impairment-related work expenses. Irs gov org Self-employed. Irs gov org   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. Irs gov org See Impairment-related work expenses. Irs gov org , later under How To Report. Irs gov org 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, or Schedule A (Form 1040NR), line 14 (only if effectively connected with a U. Irs gov org S. Irs gov org trade or business). Irs gov org It is not subject to the passive activity limitations. Irs gov org Officials Paid on a Fee Basis If you are a fee-basis official, you can claim your expenses in performing services in that job as an adjustment to income rather than as a miscellaneous itemized deduction. Irs gov org See Publication 463 for more information. Irs gov org Performing Artists If you are a qualified performing artist, you can deduct your employee business expenses as an adjustment to income rather than as a miscellaneous itemized deduction. Irs gov org If you are an employee, complete Form 2106 or Form 2106-EZ. Irs gov org See Publication 463 for more information. Irs gov org Losses From Ponzi-type Investment Schemes These losses are deductible as theft losses of income-producing property on your tax return for the year the loss was discovered. Irs gov org You figure the deductible loss in Section B of Form 4684. Irs gov org However, if you qualify to use Revenue Procedure 2009-20 (as modified by Revenue Procedure 2011-58) and you choose to follow the procedures in the guidance, complete Section C of Form 4684 before completing Section B. Irs gov org Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Irs gov org You do not need to complete Appendix A. Irs gov org See the Form 4684 instructions and Publication 547, Casualties, Disasters, and Thefts, for more information. Irs gov org 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. Irs gov org See Repayments in Publication 525 for more information. Irs gov org 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. Irs gov org 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. Irs gov org See Publication 575, Pension and Annuity Income, for more information about the tax treatment of pensions and annuities. Irs gov org Nondeductible Expenses You cannot deduct the following expenses. Irs gov org List of Nondeductible Expenses Adoption expenses. Irs gov org Broker's commissions. Irs gov org Burial or funeral expenses, including the cost of a cemetery lot. Irs gov org Campaign expenses. Irs gov org Capital expenses. Irs gov org Check-writing fees. Irs gov org Club dues. Irs gov org Commuting expenses. Irs gov org Fees and licenses, such as car licenses, marriage licenses, and dog tags. Irs gov org Fines and penalties, such as parking tickets. Irs gov org Health spa expenses. Irs gov org Hobby losses—but see Hobby Expenses, earlier. Irs gov org Home repairs, insurance, and rent. Irs gov org Home security system. Irs gov org Illegal bribes and kickbacks—see Bribes and kickbacks in chapter 11 of Publication 535. Irs gov org Investment-related seminars. Irs gov org Life insurance premiums paid by the insured. Irs gov org Lobbying expenses. Irs gov org Losses from the sale of your home, furniture, personal car, etc. Irs gov org Lost or misplaced cash or property. Irs gov org Lunches with co-workers. Irs gov org Meals while working late. Irs gov org Medical expenses as business expenses other than medical examinations required by your employer. Irs gov org Personal disability insurance premiums. Irs gov org Personal legal expenses. Irs gov org Personal, living, or family expenses. Irs gov org Political contributions. Irs gov org Professional accreditation fees. Irs gov org Professional reputation, expenses to improve. Irs gov org Relief fund contributions. Irs gov org Residential telephone line. Irs gov org Stockholders' meeting, expenses of attending. Irs gov org Tax-exempt income, expenses of earning or collecting. Irs gov org The value of wages never received or lost vacation time. Irs gov org Travel expenses for another individual. Irs gov org Voluntary unemployment benefit fund contributions. Irs gov org Wristwatches. Irs gov org Adoption Expenses You cannot deduct the expenses of adopting a child but you may be able to take a credit for those expenses. Irs gov org For details, see Form 8839, Qualified Adoption Expenses. Irs gov org Commissions Commissions paid on the purchase of securities are not deductible, either as business or nonbusiness expenses. Irs gov org Instead, these fees must be added to the taxpayer's cost of the securities. Irs gov org Commissions paid on the sale are deductible as business expenses only by dealers. Irs gov org Campaign Expenses You cannot deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to the office. Irs gov org These include qualification and registration fees for primary elections. Irs gov org Legal fees. Irs gov org   You cannot deduct legal fees paid to defend charges that arise from participation in a political campaign. Irs gov org Capital Expenses You cannot currently deduct amounts paid to buy property that has a useful life substantially beyond the tax year or amounts paid to increase the value or prolong the life of property. Irs gov org If you use such property in your work, you may be able to take a depreciation deduction. Irs gov org See Publication 946. Irs gov org If the property is a car used in your work, also see Publication 463. Irs gov org 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. Irs gov org Club Dues Generally, you cannot deduct the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. Irs gov org This includes business, social, athletic, luncheon, sporting, airline, hotel, golf, and country clubs. Irs gov org 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. Irs gov org Dues paid to airline, hotel, and luncheon clubs are not deductible. Irs gov org Commuting Expenses You cannot deduct commuting expenses (the cost of transportation between your home and your main or regular place of work). Irs gov org 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. Irs gov org Fines or Penalties You cannot deduct fines or penalties you pay to a governmental unit for violating a law. Irs gov org This includes an amount paid in settlement of your actual or potential liability for a fine or penalty (civil or criminal). Irs gov org Fines or penalties include parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike. Irs gov org 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. Irs gov org Home Security System You cannot deduct the cost of a home security system as a miscellaneous deduction. Irs gov org However, you may be able to claim a deduction for a home security system as a business expense if you have a home office. Irs gov org See Home Office under Unreimbursed Employee Expenses, earlier, and Publication 587. Irs gov org Investment-Related Seminars You cannot deduct any expenses for attending a convention, seminar, or similar meeting for investment purposes. Irs gov org Life Insurance Premiums You cannot deduct premiums you pay on your life insurance. Irs gov org You may be able to deduct, as alimony, premiums you pay on life insurance policies assigned to your former spouse. Irs gov org See Publication 504, Divorced or Separated Individuals, for information on alimony. Irs gov org Lobbying Expenses You generally cannot deduct amounts paid or incurred for lobbying expenses. Irs gov org 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. Irs gov org Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordination of any of these activities. Irs gov org Covered executive branch official. Irs gov org   A covered executive branch official, for the purpose of (4) above, is any of the following officials. Irs gov org The President. Irs gov org The Vice President. Irs gov org Any officer or employee of the White House Office of the Executive Office of the President, and the two most senior level officers of each of the other agencies in the Executive Office. Irs gov org Any individual serving in a position in Level I of the Executive Schedule under section 5312 of Title 5, United States Code, any other individual designated by the President as having Cabinet-level status, and any immediate deputy of one of these individuals. Irs gov org Dues used for lobbying. Irs gov org   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. Irs gov org Exceptions. Irs gov org   You can deduct certain lobbying expenses if they are ordinary and necessary expenses of carrying on your trade or business. Irs gov org You can deduct expenses for attempting to influence the legislation of any local council or similar governing body (local legislation). Irs gov org An Indian tribal government is considered a local council or similar governing body. Irs gov org You can deduct in-house expenses for influencing legislation or communicating directly with a covered executive branch official if the expenses for the tax year are not more than $2,000 (not counting overhead expenses). Irs gov org If you are a professional lobbyist, you can deduct the expenses you incur in the trade or business of lobbying on behalf of another person. Irs gov org Payments by the other person to you for lobbying activities cannot be deducted. Irs gov org Lost or Mislaid Cash or Property You cannot deduct a loss based on the mere disappearance of money or property. Irs gov org 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. Irs gov org See Publication 547. Irs gov org Example. Irs gov org A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Irs gov org The diamond falls from the ring and is never found. Irs gov org The loss of the diamond is a casualty. Irs gov org Lunches With Co-workers You cannot deduct the expenses of lunches with co-workers, except while traveling away from home on business. Irs gov org See Publication 463 for information on deductible expenses while traveling away from home. Irs gov org Meals While Working Late You cannot deduct the cost of meals while working late. Irs gov org However, you may be able to claim a deduction if the cost of the meals is a deductible entertainment expense, or if you are traveling away from home. Irs gov org See Publication 463 for information on deductible entertainment expenses and expenses while traveling away from home. Irs gov org Personal Legal Expenses You cannot deduct personal legal expenses such as those for the following. Irs gov org Custody of children. Irs gov org Breach of promise to marry suit. Irs gov org Civil or criminal charges resulting from a personal relationship. Irs gov org Damages for personal injury (except certain whistleblower claims and unlawful discrimination claims). Irs gov org For more information about unlawful discrimination claims, see Deductions Subject to the 2% Limit, earlier. Irs gov org Preparation of a title (or defense or perfection of a title). Irs gov org Preparation of a will. Irs gov org Property claims or property settlement in a divorce. Irs gov org You cannot deduct these expenses even if a result of the legal proceeding is the loss of income-producing property. Irs gov org Political Contributions You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. Irs gov org Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible. Irs gov org Professional Accreditation Fees You cannot deduct professional accreditation fees such as the following. Irs gov org Accounting certificate fees paid for the initial right to practice accounting. Irs gov org Bar exam fees and incidental expenses in securing initial admission to the bar. Irs gov org Medical and dental license fees paid to get initial licensing. Irs gov org Professional Reputation You cannot deduct expenses of radio and TV appearances to increase your personal prestige or establish your professional reputation. Irs gov org 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. Irs gov org 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. Irs gov org 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. Irs gov org You cannot deduct these expenses even if you are attending the meeting to get information that would be useful in making further investments. Irs gov org Tax-Exempt Income Expenses You cannot deduct expenses to produce tax-exempt income. Irs gov org You cannot deduct interest on a debt incurred or continued to buy or carry tax-exempt securities. Irs gov org If you have expenses to p