CHAPTER 19
Other Itemized Deductions

Apart from the expenses listed in Chapters 14 through 18, only a few expenses can be claimed as itemized deductions on Schedule A (Form 1040 or 1040-SR). These include net qualified disaster losses, casualty and theft losses of income-producing property, gambling losses to the extent of reported gambling winnings, and impairment-related job expenses (19.1).

A wide-ranging list of expenses that were deductible before 2018 to the extent that the total exceeded 2% of adjusted gross income are not deductible for 2018 through 2025. These include unreimbursed employee expenses (employee travel expenses, work clothes, union and professional dues, education expenses, and home office expenses), investment expenses, legal expenses, and tax preparation expenses (19.2).

19.1 Only a Few Expenses Are Allowed as “Other” Itemized Deductions

If you itemize deductions on Schedule A, the following expenses may be claimed on Line 16 as “Other Itemized Deductions”:

Impairment-related work expenses. If you have a physical or mental disability that substantially limits your ability to walk, speak, breathe, or perform manual tasks and which limits your ability to work, you can deduct unreimbursed ordinary and necessary expenses that enable you to work. This includes attendant care services at your place of work and similar expenses.

If you are an employee, enter the impairment-related work expenses as well as any employer reimbursements on Form 2106. Then enter the unreimbursed amount on Line 16 (Other Itemized Deductions) of Schedule A.

If you are self-employed, the impairment-related expenses are reported as business expenses on Schedule C (40.6) and not as an itemized deduction.

Casualty and theft losses of property held for investment. If your investment property (work of art, rental property, stocks, bonds, precious metals) was stolen or damaged in a storm or other casualty, figure your allowable loss on Section B of Form 4684 (18.7, 18.9). If you are a victim of a Ponzi or Ponzi-type scheme, your loss is treated as a theft loss of investment property; see 18.7.

Net qualified disaster loss. A net qualified disaster loss from Form 4684 (18.8) is added to any other “other itemized deductions” on Line 16 of Schedule A.

If you claim the standard deduction rather than itemizing, the net qualified disaster loss is still allowed and reported on Line 16 of Schedule A. You combine your regular standard deduction with the net qualified disaster loss and show the increased standard deduction amount on Line 16; the combined amount is entered on Form 1040 or 1040-SR as your standard deduction.

Gambling losses up to reported gambling winnings. As discussed at 11.3, gambling losses are deductible only up to the amount of gambling winnings reported as “other income” on Schedule 1 (1040 or 1040-SR).

Repayment of more than $3,000 that you previously included in income under a claim of right. Instead of claiming the repayment as an “other” itemized deduction, you may recompute your tax for the year you reported the income and claim a tax credit for the year you repay it (2.8).

Estate tax attributable to income in respect of a decedent (IRD). If federal estate tax was paid on IRD that you include on your return, the estate tax attributable to that IRD is deductible (11.17).

Amortizable bond premium in excess of interest on taxable bond. If the allocable amortizable premium exceeds the interest income for the year, the excess premium is deductible (4.17).

Unrecovered investment in employee annuity. If the last surviving annuitant of an employee annuity dies before the retiree’s entire investment is recovered tax free, the balance is deductible on the final income tax return of the last annuitant; see the Example in 7.25.

Ordinary loss attributable to a contingent debt instrument or an inflation-indexed debt instrument. The ordinary loss on a Treasury Inflation-Protected Security (TIPS) is reported here.

Unrecovered investment in annuity. If a person dies before recovering the investment in an annuity with a starting date before 1986, the unrecovered amount is treated as an itemized deduction on the decedent’s final income tax return. For an annuity that started later, the unrecovered cost is not deductible.

19.2 Deductions for Job Costs and Other Miscellaneous Expenses No Longer Allowed

For 2018 through 2025, all the miscellaneous itemized deductions that were deductible for 2017 and prior years to the extent they exceeded 2% of adjusted gross income are not deductible. The 2% floor had the effect of substantially reducing or eliminating the deduction for these expenses, but now an itemized deduction for these expenses is completely disallowed regardless of amount.

In general, three categories of expenses are no longer deductible: (1) unreimbursed employee expenses, (2) tax preparation expenses and practitioner fees for representing you in a tax dispute before the IRS or a court, and (3) fees to produce or collect taxable income and costs of managing or protecting investment property.

Here is a more specific list of expenses that are no longer deductible itemized deductions:

  • Unreimbursed employee expenses. This includes employee travel and meals expenses on trips away from home (20.6), local transportation costs to see clie nts or customers, union dues, professional and business association dues, uniforms and work clothes, costs of looking for a new job in the same line of work, employee home office expenses, job-related education costs, and business bad debt on a loan made to your employer to protect your job.

    However, the non-deduction rule for unreimbursed employee expenses does not apply to a few expenses that are allowed as an above-the-line deduction (an “adjustment to income” (12.2) allowed whether you claim the standard deduction or itemized deductions). This includes educator expenses up to $250, qualifying travel costs of Armed Forces Reservists, expenses of state or local government officials paid on a fee basis, and expenses of qualifying performing artists.

  • General tax advice and tax return preparation fees. If you are self-employed, a tax practitioner’s fee for preparing your Schedule C and related schedules, or Schedule F (farming) and related schedules, is a business expense deductible on the Schedule C or F. Similarly, a tax preparation fee allocable to reporting rental or royalty income on Schedule E is deduced on that form.
  • Fees to a tax practitioner to represent you at an IRS examination, trial, or hearing involving any tax.
  • Appraisal fees related to casualty losses and charitable property contributions.
  • Investment costs, e.g., IRA custodial fees, safe-deposit rentals, subscriptions to investment services, fees to investment counselors, and travel costs of a trip away from home (20.6) to look after investment property or confer with an attorney, accountant, or financial advisor about managing your investments.
  • Legal fees for recovering taxable job-related damages or personal damages. However, legal fees for certain discrimination suits are deducible from gross income (12.2). If you are self -employed, legal fees relating to your business are deductible on Schedule C (Schedule F for farming).