IRS Publication 529: Miscellaneous Deductions
Miscellaneous itemized deductions can reduce your taxable income — but only if you understand the 2% AGI floor and which expenses survive the TCJA suspension. Publication 529 defines exactly what qualifies, what's currently suspended, and what remains deductible through 2025 and beyond.
Miscellaneous Deductions Subject to the 2% AGI Floor
Under IRS Publication 529, these deductions are only allowed to the extent they exceed 2% of your Adjusted Gross Income (AGI). For example, with a $100,000 AGI, you can only deduct the portion of these expenses that exceeds $2,000. Most of these are currently suspended for tax years 2018-2025 under the TCJA, but they are critical to understand for amended returns, pre-2018 audits, and post-2025 planning.
Unreimbursed Employee Business Expenses
Travel, transportation, meals (subject to 50% limit), lodging, union dues, professional society dues, work clothes and uniforms not suitable for everyday wear, small tools and supplies, home office expenses for the convenience of the employer, job search expenses, and education required to maintain or improve skills for your current job. Suspended for W-2 employees 2018-2025 under TCJA.
Tax Preparation Fees
Fees paid for preparation of your tax return, including tax software, e-filing fees, and professional preparer fees. Also includes fees for tax planning and advice, IRS audit representation, and fees for resolving tax disputes. These are suspended 2018-2025 under TCJA.
Investment Expenses
Fees for investment counseling and advice, safe deposit box rental for storing investment documents, IRA custodial fees (if paid separately and not deducted from the account), certain legal and accounting fees related to producing or collecting taxable income, and fees paid to collect interest and dividends. Suspended 2018-2025 under TCJA.
Hobby Expenses
Expenses related to a hobby activity (not a business) are deductible as miscellaneous itemized deductions, but ONLY up to the amount of hobby income reported and only to the extent total miscellaneous deductions exceed 2% of AGI. The IRS distinguishes hobbies from businesses based on the profit motive. Suspended 2018-2025 under TCJA.
Other 2%-Floor Deductions
Work-related education expenses, occupational taxes, repayments of income reported in a prior year (claim of right deduction over $3,000), certain legal fees, fees for professional certifications and licenses, malpractice insurance premiums, and medical examinations required by an employer. All suspended 2018-2025 under TCJA.
Deductions That SURVIVE the TCJA Suspension
Not all miscellaneous deductions were suspended by the TCJA. The following deductions remain available even for tax years 2018 through 2025 and should be carefully tracked:
Gambling Losses
Gambling losses are deductible as an OTHER itemized deduction (not subject to the 2% floor) but only up to the amount of gambling winnings reported as income. You must keep a detailed diary or log of winnings and losses — casual estimates are not accepted by the IRS. This deduction survived the TCJA and remains fully available.
Impairment-Related Work Expenses
Employees with physical or mental disabilities can deduct impairment-related work expenses that enable them to work. These include attendant care at the workplace, special transportation, and adaptive equipment. These are deducted as an adjustment on Schedule 1 (not as a miscellaneous deduction), so they are not affected by the 2% floor rules or TCJA suspension.
Unrecovered Pension Investment
If you contributed after-tax money to a pension or annuity and the total payments you receive before death are less than your total investment, the unrecovered amount is deductible as a miscellaneous deduction on your final return. This is NOT subject to the 2% AGI floor and survives the TCJA suspension.
Certain Other Exceptions
Deductions for amortizable bond premiums on taxable bonds, certain termination payments, and repayments under a claim of right deduction where the amount repaid is $3,000 or less are NOT subject to the 2% floor. Clergy members and certain performing artists may also have special rules. Self-employed individuals continue to deduct all ordinary and necessary business expenses on Schedule C, unaffected by Publication 529 limits.
Need Help With Your Miscellaneous Deductions? We Analyze Every Dollar
Whether you are filing an amended return for a pre-TCJA year, planning for post-2025 when the 2% floor returns, or need help with gambling loss documentation, our CPAs and enrolled agents can ensure every allowable deduction is claimed while protecting you from audit exposure. Do not leave money on the table — or invite IRS scrutiny by claiming deductions you cannot substantiate.