Reduce your taxes with miscellaneous deductions
DALLAS - If you itemize deductions on your tax return, you may be able to deduct certain miscellaneous expenses. You may benefit from this because a tax deduction normally reduces your federal income tax.
Here are some things you should know about miscellaneous deductions:
Deductions Subject to the Two Percent Limit. You can deduct most miscellaneous expenses only if they exceed two percent of your adjusted gross income. These include expenses such as:
· Unreimbursed employee expenses.
· Expenses related to searching for a new job in the same profession.
· Certain work clothes and uniforms.
· Tools needed for your job.
· Union dues.
· Work-related travel and transportation.
Deductions Not Subject to the Two Percent Limit. Some deductions are not subject to the two percent of AGI limit. Some expenses on this list include:
· Certain casualty and theft losses. This deduction applies if you held the damaged or stolen property for investment. Property that you hold for investment may include assets such as stocks, bonds and works of art.
· Gambling losses up to the amount of gambling winnings.
· Losses from Ponzi-type investment schemes.
Many expenses are not deductible. For example, you can’t deduct personal living or family expenses. Report your miscellaneous deductions on Schedule A, Itemized Deductions. Be sure to keep records of your deductions as a reminder when you file your taxes in 2014.
“Retain receipts, canceled checks, financial account statements and other documentary evidence of your deductions,” said Clay Sanford, an IRS spokesman in Dallas. “You should usually keep the records supporting items on your tax returns for at least three years.”