One of the easiest ways to achieve tax relief and reduce the amount you owe is by taking advantage of miscellaneous deductions. You can deduct miscellaneous expenses by itemizing deductions on your tax return, but, before you start, there are a few things you should know:
- Expenses can normally only be deducted if they exceed two percent of your adjusted gross income. These would include work clothes or uniforms that exceed that amount, work-related travel or transportation, such as gas or flights, tools that you had to purchase in order to do your job, union dues, employee expenses that were not reimbursed by your company, and other such costs.
- There are a few miscellaneous expenses that do not fall under this two percent limit, including certain theft and casualty losses, gambling losses up to the amount of gambling winnings, losses from Ponzi-type investment schemes, and more.
- Don’t get overzealous and try to deduct too many expenses, or you may be flagged as trying to commit tax fraud. For example, personal living and family expenses are not deductable.
- You must report miscellaneous deductions on Schedule A, Itemized Deductions, and you must keep records of deductions so that you can remember them when you file your taxes in the new year.
- If you need help determining if your expenses are deductable or not, contact a tax attorney for tax help, or call the IRS and ask. It is always better to ask, before, when it comes to taxes, than to beg forgiveness, after, as hefty fines will usually accompany the latter.
