You can deduct certain expenses as miscellaneous itemized deductions on Schedule A (Form 1040 or Form 1040NR). You can claim the amount of expenses that is more than 2% of your adjusted gross income. You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. Your adjusted gross income is the amount on Form 1040, line 38, or Form 1040NR, line 37.

Generally, you apply the 2% limit after you apply any other deduction limit. For example, you apply the 50% (or 80%) limit on business-related meals and entertainment (discussed later under Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging) before you apply the 2% limit.

Deductions subject to the 2% limit are discussed in the following three categories.

  • Unreimbursed employee expenses (Schedule A (Form 1040), line 21 or Schedule A (Form 1040NR), line 9).
  • Tax preparation fees (Schedule A (Form 1040), line 22 or Schedule A (Form 1040NR), line 10).
  • Other expenses (Schedule A (Form 1040), line 23 or Schedule A (Form 1040NR), line 11).

Deductions Subject to the 2% Limit

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