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2010 Tax Act Online Login

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2010 Tax Act Online Login

2010 tax act online login Publication 524 - Additional Material Prev  Up  Next   Home   More Online Publications

Compliance & Enforcement Topics

 

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Whistleblower - Informant Award

The IRS Whistleblower Office pays money to people who blow the whistle on persons who fail to pay the tax that they owe. If the IRS uses information provided by the whistleblower, it can award the whistleblower up to 30 percent of the additional tax, penalty and other amounts it collects.

 


Fiscal 2014 Sequester Notice from Whistleblower Office dated October 1, 2013:  Impact on whistleblower payments.

Fiscal 2013 Sequester Notice from Whistleblower Office dated March 1, 2013: Impact on whistleblower payments.

Treasury proposed regulations to implement 26 USC 7623, as amended, on December 18, 2012. The public comment period has officially closed and the comments received are under evaluation. The IRS often receives comments on proposed regulations after the official comment period has closed and may consider late submissions in preparing final regulations. 

 


The Whistleblower Office has developed new rules that became effective August 1, 2012. We are providing the three Interim Guidance memoranda below. 


Deputy Commissioner for Services and Enforcement Memorandum dated June 20, 2012

 


Who can get an award?

The IRS may pay awards to people who provide specific and credible information to the IRS if the information results in the collection of taxes, penalties, interest or other amounts from the noncompliant taxpayer.

The IRS is looking for solid information, not an “educated guess” or unsupported speculation. We are also looking for a significant Federal tax issue - this is not a program for resolving personal problems or disputes about a business relationship.

What are the rules for getting an award?

The law provides for two types of awards. If the taxes, penalties, interest and other amounts in dispute exceed $2 million, and a few other qualifications are met, the IRS will pay 15 percent to 30 percent of the amount collected. If the case deals with an individual, his or her annual gross income must be more than $200,000. If the whistleblower disagrees with the outcome of the claim, he or she can appeal to the Tax Court. These rules are found at Internal Revenue Code IRC Section 7623(b) - Whistleblower Rules.

The IRS also has an award program for other whistleblowers - generally those who do not meet the dollar thresholds of $2 million in dispute or cases involving individual taxpayers with gross income of less that $200,000. The awards through this program are less, with a maximum award of 15 percent up to $10 million. In addition, the awards are discretionary and the informant cannot dispute the outcome of the claim in Tax Court. The rules for these cases are found at Internal Revenue Code IRC Section 7623(a) - Informant Claims Program, and some of the rules are different from those that apply to cases involving more than $2 million.

If you decide to submit information and seek an award for doing so, use IRS Form 211. The same form is used for both award programs.

More Information

What Happens to a Claim for an Informant Award (Whistleblower)
Procedures used and the criteria followed to identify and process informant cases

Whistleblower Law
A brief synopsis of what the new whistleblower law entails. This is the most significant change to the Services’ approach to informant awards in 140 years

How Do You File a Whistleblower Award Claim
Step by step procedures to follow to file an informant claim for award

Confidentiality and Disclosure for Whistleblowers
The rules governing confidentiality of informant information

IRC Section 7623(b) - Whistleblower Rules
The requirements of the new rules enacted in IRC Section 7623(b), the Whistleblower Program

IRC Section 7623(a) - Informant Claims Program
The requirement of the rules governing claims that do not meet the requirements of the provisions in the whistleblower program under IRC Section 7623(b). These claims are part of the Informant Claims Program

IRS Form 211
Application for Award for Original Information

News Release IR-2007-201
Procedure Unveiled for Reporting Violations of the Tax Law, Making Reward Claims

Notice 2008-4 Guidance to the public on how to file claims
Claims Submitted to the IRS Whistleblower Office under Section 7623

History of the Whistleblower/Informant Program
Historical information on the evolution of the concept of paying for leads from its inception up to the current law followed today

Realignment of Informant Claims Examination Unit into Whistleblower Office
The Informant Claims Examination Unit in Ogden, Utah has been realigned with the Whistleblower Office. Their new name is Whistleblower Office - Ogden.

Information and Whistleblower Awards

  • IRM 25.2.1, Receiving Information — This chapter provides procedures and guidance for all Service personnel to follow when receiving information dealing with whistleblowers’ claims for award.
  • IRM 25.2.2, Whistleblower Awards — This chapter provides procedures and guidance for all Service personnel to follow when dealing with payment of whistleblowers’ claims for award.

Whistleblower Office At-a-Glance
 

Annual Reports

Reporting other information to the IRS

If you have information about tax noncompliance but are not interested in an award, or you have other information you believe may be of interest to the IRS:

  • For information on how to Report Suspected Tax Fraud Activity, if you have information about an individual or company you suspect is not complying with the tax law, and you do not want to seek an award . You can remain anonymous
Page Last Reviewed or Updated: 30-Sep-2013

The 2010 Tax Act Online Login

2010 tax act online login 28. 2010 tax act online login   Miscellaneous Deductions Table of Contents What's New Introduction Useful Items - You may want to see: Deductions Subject to the 2% LimitUnreimbursed Employee Expenses (Line 21) Tax Preparation Fees (Line 22) Other Expenses (Line 23) Deductions Not Subject to the 2% LimitList of Deductions Nondeductible ExpensesList of Nondeductible Expenses What's New Standard mileage rate. 2010 tax act online login  The 2013 rate for business use of a vehicle is 56½ cents per mile. 2010 tax act online login Introduction This chapter explains which expenses you can claim as miscellaneous itemized deductions on Schedule A (Form 1040). 2010 tax act online login You must reduce the total of most miscellaneous itemized deductions by 2% of your adjusted gross income. 2010 tax act online login This chapter covers the following topics. 2010 tax act online login Deductions subject to the 2% limit. 2010 tax act online login Deductions not subject to the 2% limit. 2010 tax act online login Expenses you cannot deduct. 2010 tax act online login You must keep records to verify your deductions. 2010 tax act online login You should keep receipts, canceled checks, substitute checks, financial account statements, and other documentary evidence. 2010 tax act online login For more information on recordkeeping, get Publication 552, Record- keeping for Individuals. 2010 tax act online login Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income 529 Miscellaneous Deductions 535 Business Expenses 587 Business Use of Your Home (Including Use by Daycare Providers) 946 How To Depreciate Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses Deductions Subject to the 2% Limit You can deduct certain expenses as miscellaneous itemized deductions on Schedule A (Form 1040). 2010 tax act online login You can claim the amount of expenses that is more than 2% of your adjusted gross income. 2010 tax act online login You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. 2010 tax act online login Your adjusted gross income is the amount on Form 1040, line 38. 2010 tax act online login Generally, you apply the 2% limit after you apply any other deduction limit. 2010 tax act online login For example, you apply the 50% (or 80%) limit on business-related meals and entertainment (discussed in chapter 26) before you apply the 2% limit. 2010 tax act online login Deductions subject to the 2% limit are discussed in the three categories in which you report them on Schedule A (Form 1040). 2010 tax act online login Unreimbursed employee expenses (line 21). 2010 tax act online login Tax preparation fees (line 22). 2010 tax act online login Other expenses (line 23). 2010 tax act online login Unreimbursed Employee Expenses (Line 21) Generally, you can deduct on Schedule A (Form 1040), line 21, unreimbursed employee expenses that are: Paid or incurred during your tax year, For carrying on your trade or business of being an employee, and Ordinary and necessary. 2010 tax act online login An expense is ordinary if it is common and accepted in your trade, business, or profession. 2010 tax act online login An expense is necessary if it is appropriate and helpful to your business. 2010 tax act online login An expense does not have to be required to be considered necessary. 2010 tax act online login Examples of unreimbursed employee expenses are listed next. 2010 tax act online login The list is followed by discussions of additional unreimbursed employee expenses. 2010 tax act online login Business bad debt of an employee. 2010 tax act online login Education that is work related. 2010 tax act online login (See chapter 27. 2010 tax act online login ) Legal fees related to your job. 2010 tax act online login Licenses and regulatory fees. 2010 tax act online login Malpractice insurance premiums. 2010 tax act online login Medical examinations required by an employer. 2010 tax act online login Occupational taxes. 2010 tax act online login Passport for a business trip. 2010 tax act online login Subscriptions to professional journals and trade magazines related to your work. 2010 tax act online login Travel, transportation, entertainment, and gifts related to your work. 2010 tax act online login (See chapter 26. 2010 tax act online login ) Business Liability Insurance You can deduct insurance premiums you paid for protection against personal liability for wrongful acts on the job. 2010 tax act online login Damages for Breach of Employment Contract If you break an employment contract, you can deduct damages you pay your former employer that are attributable to the pay you received from that employer. 2010 tax act online login 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. 2010 tax act online login For more information about the rules and exceptions to the rules affecting the allowable deductions for a home computer, see Publication 529. 2010 tax act online login 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. 2010 tax act online login Similar organizations include: Boards of trade, Business leagues, Civic or public service organizations, Real estate boards, and Trade associations. 2010 tax act online login Lobbying and political activities. 2010 tax act online login   You may not be able to deduct that part of your dues that is for certain lobbying and political activities. 2010 tax act online login See Dues used for lobbying under Nondeductible Expenses, later. 2010 tax act online login 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. 2010 tax act online login If you file Form 1040A, you can deduct these expenses on line 16. 2010 tax act online login If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. 2010 tax act online login However, neither spouse can deduct more than $250 of his or her qualified expenses. 2010 tax act online login 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. 2010 tax act online login 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. 2010 tax act online login The regular and exclusive business use must be for the convenience of your employer and not just appropriate and helpful in your job. 2010 tax act online login See Publication 587 for more detailed information and a worksheet. 2010 tax act online login 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. 2010 tax act online login 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. 2010 tax act online login Employment and outplacement agency fees. 2010 tax act online login   You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation. 2010 tax act online login Employer pays you back. 2010 tax act online login   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. 2010 tax act online login (See Recoveries in chapter 12. 2010 tax act online login ) Employer pays the employment agency. 2010 tax act online login   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. 2010 tax act online login Résumé. 2010 tax act online login   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. 2010 tax act online login Travel and transportation expenses. 2010 tax act online login   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. 2010 tax act online login You can deduct the travel expenses if the trip is primarily to look for a new job. 2010 tax act online login 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. 2010 tax act online login   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. 2010 tax act online login   You can choose to use the standard mileage rate to figure your car expenses. 2010 tax act online login The 2013 rate for business use of a vehicle is 56½ cents per mile. 2010 tax act online login See chapter 26 for more information. 2010 tax act online login 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. 2010 tax act online login 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. 2010 tax act online login 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. 2010 tax act online login 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. 2010 tax act online login 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. 2010 tax act online login Research Expenses of a College Professor If you are a college professor, you can deduct research expenses, including travel expenses, for teaching, lecturing, or writing and publishing on subjects that relate directly to your teaching duties. 2010 tax act online login 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. 2010 tax act online login However, you cannot deduct the cost of travel as a form of education. 2010 tax act online login 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. 2010 tax act online login You can depreciate the cost of tools that have a useful life substantially beyond the tax year. 2010 tax act online login For more information about depreciation, see Publication 946. 2010 tax act online login Union Dues and Expenses You can deduct dues and initiation fees you pay for union membership. 2010 tax act online login You can also deduct assessments for benefit payments to unemployed union members. 2010 tax act online login However, you cannot deduct the part of the assessments or contributions that provides funds for the payment of sick, accident, or death benefits. 2010 tax act online login Also, you cannot deduct contributions to a pension fund, even if the union requires you to make the contributions. 2010 tax act online login You may not be able to deduct amounts you pay to the union that are related to certain lobbying and political activities. 2010 tax act online login See Lobbying Expenses under Nondeductible Expenses, later. 2010 tax act online login Work Clothes and Uniforms You can deduct the cost and upkeep of work clothes if the following two requirements are met. 2010 tax act online login You must wear them as a condition of your employment. 2010 tax act online login The clothes are not suitable for everyday wear. 2010 tax act online login It is not enough that you wear distinctive clothing. 2010 tax act online login The clothing must be specifically required by your employer. 2010 tax act online login Nor is it enough that you do not, in fact, wear your work clothes away from work. 2010 tax act online login The clothing must not be suitable for taking the place of your regular clothing. 2010 tax act online login 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. 2010 tax act online login ). 2010 tax act online login Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear. 2010 tax act online login 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. 2010 tax act online login Similarly, the costs of buying and maintaining blue work clothes worn by a welder at the request of a foreman are not deductible. 2010 tax act online login Protective clothing. 2010 tax act online login   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. 2010 tax act online login   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. 2010 tax act online login Military uniforms. 2010 tax act online login   You generally cannot deduct the cost of your uniforms if you are on full-time active duty in the armed forces. 2010 tax act online login 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. 2010 tax act online login In figuring the deduction, you must reduce the cost by any nontaxable allowance you receive for these expenses. 2010 tax act online login   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. 2010 tax act online login   You can deduct the cost of your uniforms if you are a civilian faculty or staff member of a military school. 2010 tax act online login Tax Preparation Fees (Line 22) You can usually deduct tax preparation fees in the year you pay them. 2010 tax act online login Thus, on your 2013 return, you can deduct fees paid in 2013 for preparing your 2012 return. 2010 tax act online login These fees include the cost of tax preparation software programs and tax publications. 2010 tax act online login They also include any fee you paid for electronic filing of your return. 2010 tax act online login Other Expenses (Line 23) You can deduct certain other expenses as miscellaneous itemized deductions subject to the 2% limit. 2010 tax act online login On Schedule A (Form 1040), line 23, you can deduct expenses that you pay: To produce or collect income that must be included in your gross income, To manage, conserve, or maintain property held for producing such income, or To determine, contest, pay, or claim a refund of any tax. 2010 tax act online login You can deduct expenses you pay for the purposes in (1) and (2) above only if they are reasonably and closely related to these purposes. 2010 tax act online login Some of these other expenses are explained in the following discussions. 2010 tax act online login If the expenses you pay produce income that is only partially taxable, see Tax-Exempt Income Expenses , later, under Nondeductible Expenses. 2010 tax act online login Appraisal Fees You can deduct appraisal fees if you pay them to figure a casualty loss or the fair market value of donated property. 2010 tax act online login 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. 2010 tax act online login First report the loss in Section B of Form 4684, Casualties and Thefts. 2010 tax act online login You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. 2010 tax act online login 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. 2010 tax act online login For other casualty and theft losses, see chapter 25. 2010 tax act online login 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. 2010 tax act online login 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. 2010 tax act online login The fees are deductible in the year paid. 2010 tax act online login 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). 2010 tax act online login You generally must depreciate the computer using the straight line method over the Alternative Depreciation System (ADS) recovery period. 2010 tax act online login But if you work as an employee and also use the computer in that work, see Publication 946. 2010 tax act online login 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. 2010 tax act online login Do not include deductions for the estate's personal exemption and charitable contributions when figuring the estate's total deductions. 2010 tax act online login 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. 2010 tax act online login For more information, see Termination of Estate in Publication 559, Survivors, Executors, and Administrators. 2010 tax act online login 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. 2010 tax act online login But you cannot deduct a fee you pay to a broker to buy investment property, such as stocks or bonds. 2010 tax act online login You must add the fee to the cost of the property. 2010 tax act online login You cannot deduct the fee you pay to a broker to sell securities. 2010 tax act online login You can use the fee only to figure gain or loss from the sale. 2010 tax act online login See the Instructions for Form 8949 for information on how to report the fee. 2010 tax act online login Hobby Expenses You can generally deduct hobby expenses, but only up to the amount of hobby income. 2010 tax act online login A hobby is not a business because it is not carried on to make a profit. 2010 tax act online login See Activity not for profit in chapter 12 under Other Income. 2010 tax act online login Indirect Deductions of Pass-Through Entities Pass-through entities include partnerships, S corporations, and mutual funds that are not publicly offered. 2010 tax act online login Deductions of pass-through entities are passed through to the partners or shareholders. 2010 tax act online login The partners or shareholders can deduct their share of passed-through deductions for investment expenses as miscellaneous itemized deductions subject to the 2% limit. 2010 tax act online login Example. 2010 tax act online login You are a member of an investment club that is formed solely to invest in securities. 2010 tax act online login The club is treated as a partnership. 2010 tax act online login The partnership's income is solely from taxable dividends, interest, and gains from sales of securities. 2010 tax act online login In this case, you can deduct your share of the partnership's operating expenses as miscellaneous itemized deductions subject to the 2% limit. 2010 tax act online login 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. 2010 tax act online login Publicly offered mutual funds. 2010 tax act online login   Publicly offered mutual funds do not pass deductions for investment expenses through to shareholders. 2010 tax act online login 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. 2010 tax act online login   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). 2010 tax act online login This net figure is the amount you report on your return as income. 2010 tax act online login You cannot further deduct investment expenses related to publicly offered mutual funds because they are already included as part of the net income amount. 2010 tax act online login Information returns. 2010 tax act online login   You should receive information returns from pass-through entities. 2010 tax act online login Partnerships and S corporations. 2010 tax act online login   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. 2010 tax act online login Nonpublicly offered mutual funds. 2010 tax act online login   These funds will send you a Form 1099-DIV, Dividends and Distributions, or a substitute form, showing your share of gross income and investment expenses. 2010 tax act online login You can claim the expenses only as a miscellaneous itemized deduction subject to the 2% limit. 2010 tax act online login 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. 2010 tax act online login 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. 2010 tax act online login 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. 2010 tax act online login 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. 2010 tax act online login You deduct expenses of resolving nonbusiness tax issues on Schedule A (Form 1040). 2010 tax act online login See Tax Preparation Fees , earlier. 2010 tax act online login Loss on Deposits For information on whether, and if so, how, you may deduct a loss on your deposit in a qualified financial institution, see Loss on Deposits in chapter 25. 2010 tax act online login 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. 2010 tax act online login If the amount you had to repay was ordinary income of $3,000 or less, the deduction is subject to the 2% limit. 2010 tax act online login If it was more than $3,000, see Repayments Under Claim of Right under Deductions Not Subject to the 2% Limit, later. 2010 tax act online login Repayments of Social Security Benefits For information on how to deduct your repayments of certain social security benefits, see Repayments More Than Gross Benefits in chapter 11. 2010 tax act online login 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. 2010 tax act online login You cannot deduct the rent if you use the box only for jewelry, other personal items, or tax-exempt securities. 2010 tax act online login Service Charges on Dividend Reinvestment Plans You can deduct service charges you pay as a subscriber in a dividend reinvestment plan. 2010 tax act online login 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. 2010 tax act online login Trustee's Administrative Fees for IRA Trustee's administrative fees that are billed separately and paid by you in connection with your individual retirement arrangement (IRA) are deductible (if they are ordinary and necessary) as a miscellaneous itemized deduction subject to the 2% limit. 2010 tax act online login For more information about IRAs, see chapter 17. 2010 tax act online login Deductions Not Subject to the 2% Limit You can deduct the items listed below as miscellaneous itemized deductions. 2010 tax act online login They are not subject to the 2% limit. 2010 tax act online login Report these items on Schedule A (Form 1040), line 28. 2010 tax act online login List of Deductions Each of the following items is discussed in detail after the list (except where indicated). 2010 tax act online login Amortizable premium on taxable bonds. 2010 tax act online login Casualty and theft losses from income- producing property. 2010 tax act online login Federal estate tax on income in respect of a decedent. 2010 tax act online login Gambling losses up to the amount of gambling winnings. 2010 tax act online login Impairment-related work expenses of persons with disabilities. 2010 tax act online login Loss from other activities from Schedule K-1 (Form 1065-B), box 2. 2010 tax act online login Losses from Ponzi-type investment schemes. 2010 tax act online login See Losses from Ponzi-type investment schemes under Theft in chapter 25. 2010 tax act online login Repayments of more than $3,000 under a claim of right. 2010 tax act online login Unrecovered investment in an annuity. 2010 tax act online login 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. 2010 tax act online login You can elect to amortize the premium on taxable bonds. 2010 tax act online login The amortization of the premium is generally an offset to interest income on the bond rather than a separate deduction item. 2010 tax act online login Part of the premium on some bonds may be a miscellaneous deduction not subject to the 2% limit. 2010 tax act online login For more information, see Amortizable Premium on Taxable Bonds in Publication 529, and Bond Premium Amortization in chapter 3 of Publication 550, Investment Income and Expenses. 2010 tax act online login 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). 2010 tax act online login First, report the loss in Form 4684, Section B. 2010 tax act online login You may also have to include the loss on Form 4797, Sales of Business Property if you are otherwise required to file that form. 2010 tax act online login 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. 2010 tax act online login For more information on casualty and theft losses, see chapter 25. 2010 tax act online login 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. 2010 tax act online login 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. 2010 tax act online login See Publication 559 for more information. 2010 tax act online login 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. 2010 tax act online login You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. 2010 tax act online login You cannot deduct gambling losses that are more than your winnings. 2010 tax act online login You cannot reduce your gambling winnings by your gambling losses and report the difference. 2010 tax act online login 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. 2010 tax act online login Therefore, your records should show your winnings separately from your losses. 2010 tax act online login Diary of winnings and losses. 2010 tax act online login You must keep an accurate diary or similar record of your losses and winnings. 2010 tax act online login Your diary should contain at least the following information. 2010 tax act online login The date and type of your specific wager or wagering activity. 2010 tax act online login The name and address or location of the gambling establishment. 2010 tax act online login The names of other persons present with you at the gambling establishment. 2010 tax act online login The amount(s) you won or lost. 2010 tax act online login See Publication 529 for more information. 2010 tax act online login 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. 2010 tax act online login Impairment-related work expenses are ordinary and necessary business expenses for attendant care services at your place of work and for other expenses in connection with your place of work that are necessary for you to be able to work. 2010 tax act online login Self-employed. 2010 tax act online login   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. 2010 tax act online login 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. 2010 tax act online login It is not subject to the passive activity limitations. 2010 tax act online login 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. 2010 tax act online login See Repayments in chapter 12 for more information. 2010 tax act online login 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. 2010 tax act online login 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. 2010 tax act online login See chapter 10 for more information about the tax treatment of pensions and annuities. 2010 tax act online login Nondeductible Expenses Examples of nondeductible expenses are listed next. 2010 tax act online login The list is followed by discussions of additional nondeductible expenses. 2010 tax act online login List of Nondeductible Expenses Broker's commissions that you paid in connection with your IRA or other investment property. 2010 tax act online login Burial or funeral expenses, including the cost of a cemetery lot. 2010 tax act online login Capital expenses. 2010 tax act online login Fees and licenses, such as car licenses, marriage licenses, and dog tags. 2010 tax act online login Hobby losses, but see Hobby Expenses , earlier. 2010 tax act online login Home repairs, insurance, and rent. 2010 tax act online login Illegal bribes and kickbacks. 2010 tax act online login See Bribes and kickbacks in chapter 11 of Publication 535. 2010 tax act online login Losses from the sale of your home, furniture, personal car, etc. 2010 tax act online login Personal disability insurance premiums. 2010 tax act online login Personal, living, or family expenses. 2010 tax act online login The value of wages never received or lost vacation time. 2010 tax act online login Adoption Expenses You cannot deduct the expenses of adopting a child, but you may be able to take a credit for those expenses. 2010 tax act online login See chapter 37. 2010 tax act online login Campaign Expenses You cannot deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to the office. 2010 tax act online login These include qualification and registration fees for primary elections. 2010 tax act online login Legal fees. 2010 tax act online login   You cannot deduct legal fees paid to defend charges that arise from participation in a political campaign. 2010 tax act online login 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. 2010 tax act online login Club Dues Generally, you cannot deduct the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. 2010 tax act online login This includes business, social, athletic, luncheon, sporting, airline, hotel, golf, and country clubs. 2010 tax act online login 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. 2010 tax act online login Dues paid to airline, hotel, and luncheon clubs are not deductible. 2010 tax act online login Commuting Expenses You cannot deduct commuting expenses (the cost of transportation between your home and your main or regular place of work). 2010 tax act online login 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. 2010 tax act online login Fines or Penalties You cannot deduct fines or penalties you pay to a governmental unit for violating a law. 2010 tax act online login This includes an amount paid in settlement of your actual or potential liability for a fine or penalty (civil or criminal). 2010 tax act online login Fines or penalties include parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike. 2010 tax act online login 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. 2010 tax act online login Home Security System You cannot deduct the cost of a home security system as a miscellaneous deduction. 2010 tax act online login However, you may be able to claim a deduction for a home security system as a business expense if you have a home office. 2010 tax act online login See Home Office under Unreimbursed Employee Expenses, earlier, and Security System under Deducting Expenses in Publication 587. 2010 tax act online login Investment-Related Seminars You cannot deduct any expenses for attending a convention, seminar, or similar meeting for investment purposes. 2010 tax act online login Life Insurance Premiums You cannot deduct premiums you pay on your life insurance. 2010 tax act online login You may be able to deduct, as alimony, premiums you pay on life insurance policies assigned to your former spouse. 2010 tax act online login See chapter 18 for information on alimony. 2010 tax act online login Lobbying Expenses You generally cannot deduct amounts paid or incurred for lobbying expenses. 2010 tax act online login 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. 2010 tax act online login Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordination of any of these activities. 2010 tax act online login Dues used for lobbying. 2010 tax act online login   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. 2010 tax act online login See Lobbying Expenses in Publication 529 for information on exceptions. 2010 tax act online login Lost or Mislaid Cash or Property You cannot deduct a loss based on the mere disappearance of money or property. 2010 tax act online login 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. 2010 tax act online login See chapter 25. 2010 tax act online login Example. 2010 tax act online login A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. 2010 tax act online login The diamond falls from the ring and is never found. 2010 tax act online login The loss of the diamond is a casualty. 2010 tax act online login Lunches with Co-workers You cannot deduct the expenses of lunches with co-workers, except while traveling away from home on business. 2010 tax act online login See chapter 26 for information on deductible expenses while traveling away from home. 2010 tax act online login Meals While Working Late You cannot deduct the cost of meals while working late. 2010 tax act online login However, you may be able to claim a deduction if the cost of meals is a deductible entertainment expense, or if you are traveling away from home. 2010 tax act online login See chapter 26 for information on deductible entertainment expenses and expenses while traveling away from home. 2010 tax act online login Personal Legal Expenses You cannot deduct personal legal expenses such as those for the following. 2010 tax act online login Custody of children. 2010 tax act online login Breach of promise to marry suit. 2010 tax act online login Civil or criminal charges resulting from a personal relationship. 2010 tax act online login Damages for personal injury, except for certain unlawful discrimination and whistleblower claims. 2010 tax act online login Preparation of a title (or defense or perfection of a title). 2010 tax act online login Preparation of a will. 2010 tax act online login Property claims or property settlement in a divorce. 2010 tax act online login You cannot deduct these expenses even if a result of the legal proceeding is the loss of income-producing property. 2010 tax act online login Political Contributions You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. 2010 tax act online login Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible. 2010 tax act online login Professional Accreditation Fees You cannot deduct professional accreditation fees such as the following. 2010 tax act online login Accounting certificate fees paid for the initial right to practice accounting. 2010 tax act online login Bar exam fees and incidental expenses in securing initial admission to the bar. 2010 tax act online login Medical and dental license fees paid to get initial licensing. 2010 tax act online login Professional Reputation You cannot deduct expenses of radio and TV appearances to increase your personal prestige or establish your professional reputation. 2010 tax act online login 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. 2010 tax act online login 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. 2010 tax act online login 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. 2010 tax act online login You cannot deduct these expenses even if you are attending the meeting to get information that would be useful in making further investments. 2010 tax act online login Tax-Exempt Income Expenses You cannot deduct expenses to produce tax-exempt income. 2010 tax act online login You cannot deduct interest on a debt incurred or continued to buy or carry  tax-exempt securities. 2010 tax act online login If you have expenses to produce both taxable and tax-exempt income, but you cannot identify the expenses that produce each type of income, you must divide the expenses based on the amount of each type of income to determine the amount that you can deduct. 2010 tax act online login Example. 2010 tax act online login During the year, you received taxable interest of $4,800 and tax-exempt interest of $1,200. 2010 tax act online login In earning this income, you had total expenses of $500 during the year. 2010 tax act online login You cannot identify the amount of each expense item that is for each income item. 2010 tax act online login Therefore, 80% ($4,800/$6,000) of the expense is for the taxable interest and 20% ($1,200/$6,000) is for the tax-exempt interest. 2010 tax act online login You can deduct, subject to the 2% limit, expenses of $400 (80% of $500). 2010 tax act online login Travel Expenses for Another Individual You generally cannot deduct travel expenses you pay or incur for a spouse, dependent, or other individual who accompanies you (or your employee) on business or personal travel unless the spouse, dependent, or other individual is an employee of the taxpayer, the travel is for a bona fide business purpose, and such expenses would otherwise be deductible by the spouse, dependent, or other individual. 2010 tax act online login See chapter 26 for more information on deductible travel expenses. 2010 tax act online login Voluntary Unemployment Benefit Fund Contributions You cannot deduct voluntary unemployment benefit fund contributions you make to a union fund or a private fund. 2010 tax act online login However, you can deduct contributions as taxes if state law requires you to make them to a state unemployment fund that covers you for the loss of wages from unemployment caused by business conditions. 2010 tax act online login Wristwatches You cannot deduct the cost of a wristwatch, even if there is a job requirement that you know the correct time to properly perform your duties. 2010 tax act online login Prev  Up  Next   Home   More Online Publications