Miscellaneous Itemized Deductions
Some deductible expenses may be deducted as miscellaneous itemized deductions, most of which are subject to a floor based on the taxpayer's adjusted gross income (AGI). Specifically, only the total of all such deductions exceeding 2% of the taxpayer's AGI is deductible. However, some miscellaneous deductions are fully deductible without regard to this 2% limit.
Miscellaneous itemized deductions for regular income tax purposes are not deductible for purposes of the alternative minimum tax (AMT) (see Chapter 33).
Miscellaneous Itemized Deductions Subject to the 2% Limit
Most miscellaneous itemized deductions are deductible to the extent they exceed the 2% limit. A taxpayer claims a miscellaneous itemized deduction on Schedule A, Itemized Deductions. The 2% limit is applied after any other limit for a particular type of expense, such as the 50% limit for business meals (explained in Chapter 26).
Three categories of expenses are subject to the 2% limit:
Tax Preparation Fees
Fees paid for income tax preparation of a taxpayer's personal income tax return are deductible in the year the fees are paid.