Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

H R Block Tax Service

Amendment Tax ReturnFree Online 1040ez FilingHow Do I File A 2012 Tax ReturnFile 2008 Taxes Online1040nr Instructions 2012Federal Taxes 20122014 1040 Ez FormIrs Gov FormsH&r Block Free State Tax E File1040ez Form For 2010Irs Form 1040xIrs Gov State Tax FormsSelf Employment Tax FormsIncome Tax Deductions 2012State Income Tax FilingFile Taxes For 20101040ez File On LineWhere To File State Taxes For FreeFile 2011 Tax ReturnAmend 2013 Tax Return2008 Federal Tax FormsAmended Tax Return 2013Download 1040ez FormWww Free State Taxes Com1040ez Instructions 2013Free Prior Tax Years FilingFile Taxes Online Free 2012Previous Year Tax FormsFree Tax Extension Online2012 Federal Tax Form1040 2010Efile IrsHow To File Taxes From 2011Filing An Amended Tax ReturnRefile Taxes2012 1040ez Form1040 Easy FormTurbotax LoginIrs Ez FileSample 1040ez

H R Block Tax Service

H r block tax service Index A Assistance (see Tax help) F Free tax services, How To Get Tax Help H Help (see Tax help) M More information (see Tax help) P Publications (see Tax help) T Tax help, How To Get Tax Help Taxpayer Advocate, Taxpayer Advocate Service. H r block tax service TTY/TDD information, How To Get Tax Help Prev  Up     Home   More Online Publications
Print - Click this link to Print this page

Tax Information for Parents

1040 Central
1040 Central has been updated for the last few weeks of Filing Season 2014.

Child and Dependent Care Information
If you paid someone to care for a child or a dependent so you could work, you may be able to reduce your federal income tax by claiming the credit for child and dependent care expenses on your tax return.

EITC Home Page--It’s easier than ever to find out if you qualify for EITC
If you worked but earned less than $51,567 during 2013, you may qualify for EITC. The Earned Income Tax Credit, sometimes called EIC is a tax credit to help you keep more of what you earned. You must file a return and claim the credit to receive it. Find out more about EITC and links to helpful tools and resources.

Child Tax Credit
This credit is for people who have a qualifying child. It can be claimed in addition to the credit for child and dependent care expenses

Tax Benefits for Education Information
Tax credits, deductions and savings plans can help taxpayers with their expenses for higher education. You could save money from the cost of tuition, books and fees or deduct interest you pay on a qualified student loan.

Adoption Taxpayer Identification Number
Information for those needing a taxpayer identification number for a child who has been placed in their home pending final adoption.

Adoption Tax Credit Information
You may be able to take a tax credit of up to $12,970 for qualified expenses paid to adopt an eligible child. The credit may be allowed for the adoption of a child with special needs even if you do not have any qualified expenses. See the Form 8839 Instructions for more information.

Filing Requirements for Children with Investment Income
Under certain circumstances a child’s investment income is taxed at the parent’s tax rate. A parent may be able to choose to include the child's income on the parent's return rather than file a return for the child.

Did you know life events like marriage, birth and divorce may have a significant tax impact?
Organized by type of life event this page provides resources that explain the tax impacts of each.

Page Last Reviewed or Updated: 28-Mar-2014

The H R Block Tax Service

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