Editor's Note: This article is part of our 2014 Tax Tips series. Robert Flach is an expert with more than 40 years of experience as a tax professional and also blogs as The Wandering Tax Pro.
NEW YORK (MainStreet) The next series of Tax Tips are about "Miscellaneous Expenses". Most Miscellaneous Expenses are deductible on Schedule A only to the extent that they exceed 2% of your AGI. If your AGI is $70,000 you must exclude the first $1,400 of such expenses the first $1,400 is not deductible. If your allowable Miscellaneous Expenses total $1,620 you only get a tax deduction of $220.
First up a deduction close to my heart.
Everyone agrees that the US Tax Code is a convoluted mess. Since 2001 Congress has made about 5,000 changes to the Code, which is now about four million words. It is no wonder that the IRS estimates more than 60% of taxpayers use a paid preparer to complete their federal and state income tax returns.
You can deduct as a Miscellaneous Expense on Schedule A, subject to the 2% of AGI exclusion, "expenses paid or incurred by a taxpayer for tax counsel or expenses paid or incurred in connection with the preparation of his tax returns or in connection with any proceedings involved in determining the extent of his tax liability or in contesting his tax liability are deductible." This is true "whether the taxing authority be Federal, State, or municipal, and whether the tax be income, estate, gift, property, or any other tax".