Most miscellaneous itemized deductions were suspended under the Tax Cuts and Jobs Act (TCJA) and remain unavailable to most taxpayers. However, a handful of specific deductions are still allowed on Schedule A (Form 1040) and may provide a tax benefit if you itemize your deductions.
If you have expenses that don't fit into common itemized deduction categories such as medical expenses, mortgage interest, charitable contributions, or state and local taxes, they may belong in the Other Itemized Deductions section.
What Deductions Are Still Allowed?
The following miscellaneous itemized deductions may still be claimed if you meet the applicable IRS requirements.
Gambling Losses
You can deduct gambling losses, but only up to the amount of gambling winnings you report on your tax return.
Examples may include:
- Non-winning lottery tickets
- Non-winning raffle tickets
- Non-winning bingo cards
- Casino gambling losses
- Sports wagering losses
You must keep records that support both your winnings and losses.
Casualty and Theft Losses on Income-Producing Property
Certain casualty and theft losses related to income-producing property may qualify for a deduction.
Examples may include:
- Rental property losses
- Property held for investment purposes
- Business-related property losses reported on the appropriate IRS forms
Special rules and reporting requirements apply.
Federal Estate Tax on Income in Respect of a Decedent (IRD)
If you've inherited income that was subject to federal estate tax, you may qualify for a deduction related to the estate tax paid on that income.
This deduction is uncommon but may apply in certain estate and inheritance situations.
Amortizable Bond Premium
You may be eligible for a deduction related to amortizable bond premium in situations involving certain taxable bonds.
This generally applies to investments purchased at a premium above their face value and may involve carryforward calculations from prior years.
Certain Debt Instrument Losses
Taxpayers may be able to deduct certain ordinary losses related to:
- Contingent payment debt instruments
- Inflation-indexed debt instruments, such as Treasury Inflation-Protected Securities (TIPS)
These deductions are subject to complex IRS rules and reporting requirements.
Repayment of Income Previously Reported
If you repaid more than $3,000 that you included in income during a prior year under the claim of right doctrine, you may qualify for a deduction.
Common examples can include:
- Repaid bonuses
- Repaid commissions
- Other income received in one year and later required to be returned
Additional calculations may be required to determine the most beneficial tax treatment.
Certain Unrecovered Investment in a Pension
If you have an unrecovered after-tax investment in a pension or annuity, a deduction may be available in certain situations.
This most commonly applies when pension benefits end before the full investment has been recovered.
Impairment-Related Work Expenses
Qualified impairment-related work expenses paid by a disabled individual may still be deductible.
These expenses generally must be necessary for the taxpayer to work and must meet specific IRS requirements.
Tax Return Preparation Fees
You can deduct the cost of your tax preparation paid during the tax year. This deduction is only available for state returns that allow it. Tax prep fees are no longer deductible on a federal return.
Where Do I Enter Other Itemized Deductions?
To enter these deductions in the software, follow these steps:
- Go to Federal.
- Select Deductions.
- Choose Select my forms.
- Open Itemized Deductions.
- Select Other Itemized Deductions.
The software will guide you through the available entries and determine whether the deduction applies to your return.
Will These Deductions Help If I Don't Itemize?
Generally, no.
Like other Schedule A deductions, these expenses only provide a federal tax benefit if your total itemized deductions exceed your standard deduction and you choose to itemize.
If the standard deduction provides a larger benefit, the software will typically use the standard deduction automatically.