You can deduct as a “Miscellaneous Expense” on Schedule A expenses incurred for the production, collection and protection of income.
You are allowed to deduct most Miscellaneous Expenses only if the total exceeds 2% of your AGI.
These expenses generally fall into four categories:
• Employee business expenses
• Investment expenses
• Tax preparation
• Legal fees to collect income
We looked at deducting tax preparation costs yesterday.
Deductible investment expenses include:
• Appraisal fees for claiming a deduction for charitable contributions and casualty losses.
• Clerical help for conservation and management of investments.
• Custodial and maintenance fees for investment accounts, including fees for IRA accounts if billed and paid separately and not deducted from the account balance.
• Fees to collect dividends and interest (often reported on Form 1099-DIV).
• Fees paid to investment advisors, plus round-trip travel to their office using the standard mileage allowance for business travel.
• Hobby expenses (to the extent of hobby income)
• Home computer costs, if you use the computer to manage investment activities, and software used for managing investments.
• Insurance premiums on policies that protect investments.
• Investment charts, newsletters, publications and services.
• Investment expenses passed through to partners and shareholders and final year excess deductions passed through to beneficiaries via Form K-1.
• Losses on IRA investments (if all IRAs have been liquidated and the total received is less than the “tax basis”).
• Losses on deposits in insolvent or bankrupt financial institutions.
• The cost of renting a safe deposit box to protect investment documents.