Two-Percent Limitation

• Many of the available miscellaneous deductions are not fully deductible. Expenses that fall into this category are deductible to the extent that they exceed 2 percent of adjusted gross income. You apply the limitation to the total annual miscellaneous deductions that are subject to this requirement, rather than applying it separately to each item. Expenses subject to this limitation include all unreimbursed expenses you incur as an employee, such as uniform costs, work-related education, business travel and union dues. Other deductions subject to the limitation include tax preparation fees, casualty and theft losses, legal expenses and the losses on IRA investments.
  
  

Gambling Losses

• If you make gambling wagers throughout the year, the IRS allows you to deduct gambling losses. The maximum deduction for losses is equal to the amount of gambling winnings you report on the same tax return. To substantiate the deduction, taxpayers must keep a written diary or record of all gambling activities. The minimum information that you must keep records for include the date and type of each wager, name and location of gambling establishment, names of people who accompany you on each gambling trip, and the amounts you win and lose.
  
  

Disability Work Expenses

• A taxpayer who has a physical or mental disability that limits one or more major life activities, such as performing manual labor, walking, speaking, breathing and learning, can deduct the cost for ordinary and necessary attendant care services. For example, if you are blind and require the assistance of a reader to perform job duties, you can fully deduct the cost of hiring the reader.
  
  

Claim of Right

• A taxpayer who must repay more than $3,000 of income that was subject to taxation in a prior year can fully deduct the amount that requires repayment in the current tax year. This deduction commonly occurs in situations where you erroneously believe you have a right to income, and later determine that the belief is wrong. For example, if a bank credits you with $8,000 of interest in one tax year, and determines in the next tax year that the credit was made in error by $4,000, you can deduct the $4,000 in the current tax year to reverse the interest income you report in the previous year.
  
  

Reporting

• To take a deduction for miscellaneous expenses, you must complete the Schedule A attachment to IRS Form 1040. Schedule A requires you to separately report the miscellaneous deductions in three categories: unreimbursed employee expenses, tax preparation fees and other expenses.