Miscellaneous Deductions Reported on Schedule A

Not all personal deductions to which you are entitled fit neatly into a category broken out on Schedule A, such as medical expenses, tax and interest payments, charitable contributions, or casualty and theft losses. All other allowable deductions that must be itemized on the return are called "miscellaneous itemized deductions." There are two categories of miscellaneous itemized deductions:

• Deductions subject to a 2% floor. All such deductions are grouped together and the total is deductible only to the extent it exceeds 2% of adjusted gross income. These include job-related expenses not reimbursed by an employer and fees for investment, legal, and tax advice.
• Deductions not subject to the 2% floor. These are deductions for casualty and theft losses from income-producing property, impairment-related work expenses for disabled employees, gambling losses (to the extent of gambling winnings), estate tax attributable to income in respect of a decedent, a deduction for repayment of amounts held under a claim of right, amortizable bond premium on bonds purchased before October 23, 1986, and unrecovered investments in pension on deceased retiree's final return.

Miscellaneous itemized deductions (other than gambling losses) are subject to reduction for high-income taxpayers. This means part of the otherwise allowable deductions cannot be claimed.

All miscellaneous itemized deductions are disallowed when computing the alternative minimum tax. This means that even if you write off miscellaneous itemized deductions for regular tax purposes, you lose any benefit from them if you are subject to the alternative minimum tax.