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H&r block 1040ez free Publication 541 - Additional Material Prev  Up  Next   Home   More Online Publications

Criminal Enforcement Topics

 

 

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How to Make an Offshore Voluntary Disclosure

The Offshore Voluntary Disclosure Program is offered to those taxpayers with undisclosed offshore accounts or assets. Please follow the process outlined below. You should refer to How to Make a Domestic Voluntary Disclosure if the undisclosed accounts are domestic in nature.

Pre-Clearance:

Taxpayers or representatives may fax to the IRS Criminal Investigation Lead Development Center at (267) 941-1115 the taxpayers' name, date of birth, social security number and address (if the taxpayer is represented by a tax professional, an executed power of attorney must be included).  

IRS Criminal Investigation will then notify taxpayers or their representatives via fax whether or not they have been cleared to make a voluntary disclosure using the Offshore Voluntary Disclosures Letter. Taxpayers or representatives with questions regarding the pre-clearance can call (267) 941-1607 or contact their nearest Criminal Investigation Office.

Note: Pre-clearance does not guarantee a taxpayer acceptance into the Offshore Voluntary Disclosure Program.    

Offshore Voluntary Disclosure Letter

If the taxpayer chooses to submit a pre-clearance request, after the taxpayer receives a pre-clearance notification, the taxpayer will have 30 days from receipt of the fax notification to complete the Offshore Voluntary Disclosure Letter and attachment (under documents). If the taxpayer chooses to bypass the pre-clearance process, the taxpayer must mail the Offshore Voluntary Disclosures Letter to the following address: 


Internal Revenue Service 
Criminal Investigation
ATTN:  Offshore Voluntary Disclosure Coordinator
Philadelphia Lead Development Center
1-D04-100
2970 Market Street
Philadelphia, PA 19104

The IRS will review the offshore Voluntary Disclosures Letters and notify the taxpayer or representative by mail whether the voluntary disclosure has been preliminarily accepted or declined. 

Complete Voluntary Disclosure Package

Once the voluntary disclosure has been preliminarily accepted, the taxpayer should send the full voluntary disclosure package to:

Internal Revenue Service
3651 S. I H 35 Stop 4301 AUSC
Austin, TX  78741
ATTN: 2011 Offshore Voluntary Disclosure Initiative

Opt Out Procedure

Taxpayers may request to opt out of the civil settlement structure of the 2009 Offshore Voluntary Disclosure Program or 2011 Offshore Voluntary Disclosure Initiative.  For specific information on the opt out process, see questions 51.1 through 51.3 under the 2011 OVDI Frequently Asked Questions and Answers.

Tax administration questions such as Where's My Refund or Where Do I File can be addressed by other IRS offices

 


Frequently Asked Questions (FAQs)

IRS Criminal Investigation Home Page

Page Last Reviewed or Updated: 24-Mar-2014

The H&r Block 1040ez Free

H&r block 1040ez free 28. H&r block 1040ez free   Miscellaneous Deductions Table of Contents What's New Introduction Useful Items - You may want to see: Deductions Subject to the 2% LimitUnreimbursed Employee Expenses (Line 21) Tax Preparation Fees (Line 22) Other Expenses (Line 23) Deductions Not Subject to the 2% LimitList of Deductions Nondeductible ExpensesList of Nondeductible Expenses What's New Standard mileage rate. H&r block 1040ez free  The 2013 rate for business use of a vehicle is 56½ cents per mile. H&r block 1040ez free Introduction This chapter explains which expenses you can claim as miscellaneous itemized deductions on Schedule A (Form 1040). H&r block 1040ez free You must reduce the total of most miscellaneous itemized deductions by 2% of your adjusted gross income. H&r block 1040ez free This chapter covers the following topics. H&r block 1040ez free Deductions subject to the 2% limit. H&r block 1040ez free Deductions not subject to the 2% limit. H&r block 1040ez free Expenses you cannot deduct. H&r block 1040ez free You must keep records to verify your deductions. H&r block 1040ez free You should keep receipts, canceled checks, substitute checks, financial account statements, and other documentary evidence. H&r block 1040ez free For more information on recordkeeping, get Publication 552, Record- keeping for Individuals. H&r block 1040ez free Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 525 Taxable and Nontaxable Income 529 Miscellaneous Deductions 535 Business Expenses 587 Business Use of Your Home (Including Use by Daycare Providers) 946 How To Depreciate Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses Deductions Subject to the 2% Limit You can deduct certain expenses as miscellaneous itemized deductions on Schedule A (Form 1040). H&r block 1040ez free You can claim the amount of expenses that is more than 2% of your adjusted gross income. H&r block 1040ez free You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. H&r block 1040ez free Your adjusted gross income is the amount on Form 1040, line 38. H&r block 1040ez free Generally, you apply the 2% limit after you apply any other deduction limit. H&r block 1040ez free For example, you apply the 50% (or 80%) limit on business-related meals and entertainment (discussed in chapter 26) before you apply the 2% limit. H&r block 1040ez free Deductions subject to the 2% limit are discussed in the three categories in which you report them on Schedule A (Form 1040). H&r block 1040ez free Unreimbursed employee expenses (line 21). H&r block 1040ez free Tax preparation fees (line 22). H&r block 1040ez free Other expenses (line 23). H&r block 1040ez free Unreimbursed Employee Expenses (Line 21) Generally, you can deduct on Schedule A (Form 1040), line 21, unreimbursed employee expenses that are: Paid or incurred during your tax year, For carrying on your trade or business of being an employee, and Ordinary and necessary. H&r block 1040ez free An expense is ordinary if it is common and accepted in your trade, business, or profession. H&r block 1040ez free An expense is necessary if it is appropriate and helpful to your business. H&r block 1040ez free An expense does not have to be required to be considered necessary. H&r block 1040ez free Examples of unreimbursed employee expenses are listed next. H&r block 1040ez free The list is followed by discussions of additional unreimbursed employee expenses. H&r block 1040ez free Business bad debt of an employee. H&r block 1040ez free Education that is work related. H&r block 1040ez free (See chapter 27. H&r block 1040ez free ) Legal fees related to your job. H&r block 1040ez free Licenses and regulatory fees. H&r block 1040ez free Malpractice insurance premiums. H&r block 1040ez free Medical examinations required by an employer. H&r block 1040ez free Occupational taxes. H&r block 1040ez free Passport for a business trip. H&r block 1040ez free Subscriptions to professional journals and trade magazines related to your work. H&r block 1040ez free Travel, transportation, entertainment, and gifts related to your work. H&r block 1040ez free (See chapter 26. H&r block 1040ez free ) Business Liability Insurance You can deduct insurance premiums you paid for protection against personal liability for wrongful acts on the job. H&r block 1040ez free Damages for Breach of Employment Contract If you break an employment contract, you can deduct damages you pay your former employer that are attributable to the pay you received from that employer. H&r block 1040ez free Depreciation on Computers You can claim a depreciation deduction for a computer that you use in your work as an employee if its use is: For the convenience of your employer, and Required as a condition of your employment. H&r block 1040ez free For more information about the rules and exceptions to the rules affecting the allowable deductions for a home computer, see Publication 529. H&r block 1040ez free Dues to Chambers of Commerce and Professional Societies You may be able to deduct dues paid to professional organizations (such as bar associations and medical associations) and to chambers of commerce and similar organizations, if membership helps you carry out the duties of your job. H&r block 1040ez free Similar organizations include: Boards of trade, Business leagues, Civic or public service organizations, Real estate boards, and Trade associations. H&r block 1040ez free Lobbying and political activities. H&r block 1040ez free   You may not be able to deduct that part of your dues that is for certain lobbying and political activities. H&r block 1040ez free See Dues used for lobbying under Nondeductible Expenses, later. H&r block 1040ez free Educator Expenses If you were an eligible educator in 2013, you can deduct up to $250 of qualified expenses you paid in 2013 as an adjustment to gross income on Form 1040, line 23, rather than as a miscellaneous itemized deduction. H&r block 1040ez free If you file Form 1040A, you can deduct these expenses on line 16. H&r block 1040ez free If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. H&r block 1040ez free However, neither spouse can deduct more than $250 of his or her qualified expenses. H&r block 1040ez free Home Office If you use a part of your home regularly and exclusively for business purposes, you may be able to deduct a part of the operating expenses and depreciation of your home. H&r block 1040ez free You can claim this deduction for the business use of a part of your home only if you use that part of your home regularly and exclusively: As your principal place of business for any trade or business, As a place to meet or deal with your patients, clients, or customers in the normal course of your trade or business, or In the case of a separate structure not attached to your home, in connection with your trade or business. H&r block 1040ez free The regular and exclusive business use must be for the convenience of your employer and not just appropriate and helpful in your job. H&r block 1040ez free See Publication 587 for more detailed information and a worksheet. H&r block 1040ez free Job Search Expenses You can deduct certain expenses you have in looking for a new job in your present occupation, even if you do not get a new job. H&r block 1040ez free You cannot deduct these expenses if: You are looking for a job in a new occupation, There was a substantial break between the ending of your last job and your looking for a new one, or You are looking for a job for the first time. H&r block 1040ez free Employment and outplacement agency fees. H&r block 1040ez free   You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation. H&r block 1040ez free Employer pays you back. H&r block 1040ez free   If, in a later year, your employer pays you back for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year. H&r block 1040ez free (See Recoveries in chapter 12. H&r block 1040ez free ) Employer pays the employment agency. H&r block 1040ez free   If your employer pays the fees directly to the employment agency and you are not responsible for them, you do not include them in your gross income. H&r block 1040ez free Résumé. H&r block 1040ez free   You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers if you are looking for a new job in your present occupation. H&r block 1040ez free Travel and transportation expenses. H&r block 1040ez free   If you travel to an area and, while there, you look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. H&r block 1040ez free You can deduct the travel expenses if the trip is primarily to look for a new job. H&r block 1040ez free The amount of time you spend on personal activity compared to the amount of time you spend in looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job. H&r block 1040ez free   Even if you cannot deduct the travel expenses to and from an area, you can deduct the expenses of looking for a new job in your present occupation while in the area. H&r block 1040ez free   You can choose to use the standard mileage rate to figure your car expenses. H&r block 1040ez free The 2013 rate for business use of a vehicle is 56½ cents per mile. H&r block 1040ez free See chapter 26 for more information. H&r block 1040ez free Licenses and Regulatory Fees You can deduct the amount you pay each year to state or local governments for licenses and regulatory fees for your trade, business, or profession. H&r block 1040ez free Occupational Taxes You can deduct an occupational tax charged at a flat rate by a locality for the privilege of working or conducting a business in the locality. H&r block 1040ez free If you are an employee, you can claim occupational taxes only as a miscellaneous deduction subject to the 2% limit; you cannot claim them as a deduction for taxes elsewhere on your return. H&r block 1040ez free Repayment of Income Aid Payment An “income aid payment” is one that is received under an employer's plan to aid employees who lose their jobs because of lack of work. H&r block 1040ez free If you repay a lump-sum income aid payment that you received and included in income in an earlier year, you can deduct the repayment. H&r block 1040ez free Research Expenses of a College Professor If you are a college professor, you can deduct research expenses, including travel expenses, for teaching, lecturing, or writing and publishing on subjects that relate directly to your teaching duties. H&r block 1040ez free You must have undertaken the research as a means of carrying out the duties expected of a professor and without expectation of profit apart from salary. H&r block 1040ez free However, you cannot deduct the cost of travel as a form of education. H&r block 1040ez free Tools Used in Your Work Generally, you can deduct amounts you spend for tools used in your work if the tools wear out and are thrown away within 1 year from the date of purchase. H&r block 1040ez free You can depreciate the cost of tools that have a useful life substantially beyond the tax year. H&r block 1040ez free For more information about depreciation, see Publication 946. H&r block 1040ez free Union Dues and Expenses You can deduct dues and initiation fees you pay for union membership. H&r block 1040ez free You can also deduct assessments for benefit payments to unemployed union members. H&r block 1040ez free However, you cannot deduct the part of the assessments or contributions that provides funds for the payment of sick, accident, or death benefits. H&r block 1040ez free Also, you cannot deduct contributions to a pension fund, even if the union requires you to make the contributions. H&r block 1040ez free You may not be able to deduct amounts you pay to the union that are related to certain lobbying and political activities. H&r block 1040ez free See Lobbying Expenses under Nondeductible Expenses, later. H&r block 1040ez free Work Clothes and Uniforms You can deduct the cost and upkeep of work clothes if the following two requirements are met. H&r block 1040ez free You must wear them as a condition of your employment. H&r block 1040ez free The clothes are not suitable for everyday wear. H&r block 1040ez free It is not enough that you wear distinctive clothing. H&r block 1040ez free The clothing must be specifically required by your employer. H&r block 1040ez free Nor is it enough that you do not, in fact, wear your work clothes away from work. H&r block 1040ez free The clothing must not be suitable for taking the place of your regular clothing. H&r block 1040ez free Examples of workers who may be able to deduct the cost and upkeep of work clothes are: delivery workers, firefighters, health care workers, law enforcement officers, letter carriers, professional athletes, and transportation workers (air, rail, bus, etc. H&r block 1040ez free ). H&r block 1040ez free Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear. H&r block 1040ez free However, work clothing consisting of white cap, white shirt or white jacket, white bib overalls, and standard work shoes, which a painter is required by his union to wear on the job, is not distinctive in character or in the nature of a uniform. H&r block 1040ez free Similarly, the costs of buying and maintaining blue work clothes worn by a welder at the request of a foreman are not deductible. H&r block 1040ez free Protective clothing. H&r block 1040ez free   You can deduct the cost of protective clothing required in your work, such as safety shoes or boots, safety glasses, hard hats, and work gloves. H&r block 1040ez free   Examples of workers who may be required to wear safety items are: carpenters, cement workers, chemical workers, electricians, fishing boat crew members, machinists, oil field workers, pipe fitters, steamfitters, and truck drivers. H&r block 1040ez free Military uniforms. H&r block 1040ez free   You generally cannot deduct the cost of your uniforms if you are on full-time active duty in the armed forces. H&r block 1040ez free However, if you are an armed forces reservist, you can deduct the unreimbursed cost of your uniform if military regulations restrict you from wearing it except while on duty as a reservist. H&r block 1040ez free In figuring the deduction, you must reduce the cost by any nontaxable allowance you receive for these expenses. H&r block 1040ez free   If local military rules do not allow you to wear fatigue uniforms when you are off duty, you can deduct the amount by which the cost of buying and keeping up these uniforms is more than the uniform allowance you receive. H&r block 1040ez free   You can deduct the cost of your uniforms if you are a civilian faculty or staff member of a military school. H&r block 1040ez free Tax Preparation Fees (Line 22) You can usually deduct tax preparation fees in the year you pay them. H&r block 1040ez free Thus, on your 2013 return, you can deduct fees paid in 2013 for preparing your 2012 return. H&r block 1040ez free These fees include the cost of tax preparation software programs and tax publications. H&r block 1040ez free They also include any fee you paid for electronic filing of your return. H&r block 1040ez free Other Expenses (Line 23) You can deduct certain other expenses as miscellaneous itemized deductions subject to the 2% limit. H&r block 1040ez free On Schedule A (Form 1040), line 23, you can deduct expenses that you pay: To produce or collect income that must be included in your gross income, To manage, conserve, or maintain property held for producing such income, or To determine, contest, pay, or claim a refund of any tax. H&r block 1040ez free You can deduct expenses you pay for the purposes in (1) and (2) above only if they are reasonably and closely related to these purposes. H&r block 1040ez free Some of these other expenses are explained in the following discussions. H&r block 1040ez free If the expenses you pay produce income that is only partially taxable, see Tax-Exempt Income Expenses , later, under Nondeductible Expenses. H&r block 1040ez free Appraisal Fees You can deduct appraisal fees if you pay them to figure a casualty loss or the fair market value of donated property. H&r block 1040ez free Casualty and Theft Losses You can deduct a casualty or theft loss as a miscellaneous itemized deduction subject to the 2% limit if you used the damaged or stolen property in performing services as an employee. H&r block 1040ez free First report the loss in Section B of Form 4684, Casualties and Thefts. H&r block 1040ez free You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. H&r block 1040ez free To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. H&r block 1040ez free For other casualty and theft losses, see chapter 25. H&r block 1040ez free Clerical Help and Office Rent You can deduct office expenses, such as rent and clerical help, that you have in connection with your investments and collecting the taxable income on them. H&r block 1040ez free Credit or Debit Card Convenience Fees You can deduct the convenience fee charged by the card processor for paying your income tax (including estimated tax payments) by credit or debit card. H&r block 1040ez free The fees are deductible in the year paid. H&r block 1040ez free Depreciation on Home Computer You can deduct depreciation on your home computer if you use it to produce income (for example, to manage your investments that produce taxable income). H&r block 1040ez free You generally must depreciate the computer using the straight line method over the Alternative Depreciation System (ADS) recovery period. H&r block 1040ez free But if you work as an employee and also use the computer in that work, see Publication 946. H&r block 1040ez free Excess Deductions of an Estate If an estate's total deductions in its last tax year are more than its gross income for that year, the beneficiaries succeeding to the estate's property can deduct the excess. H&r block 1040ez free Do not include deductions for the estate's personal exemption and charitable contributions when figuring the estate's total deductions. H&r block 1040ez free The beneficiaries can claim the deduction only for the tax year in which, or with which, the estate terminates, whether the year of termination is a normal year or a short tax year. H&r block 1040ez free For more information, see Termination of Estate in Publication 559, Survivors, Executors, and Administrators. H&r block 1040ez free Fees to Collect Interest and Dividends You can deduct fees you pay to a broker, bank, trustee, or similar agent to collect your taxable bond interest or dividends on shares of stock. H&r block 1040ez free But you cannot deduct a fee you pay to a broker to buy investment property, such as stocks or bonds. H&r block 1040ez free You must add the fee to the cost of the property. H&r block 1040ez free You cannot deduct the fee you pay to a broker to sell securities. H&r block 1040ez free You can use the fee only to figure gain or loss from the sale. H&r block 1040ez free See the Instructions for Form 8949 for information on how to report the fee. H&r block 1040ez free Hobby Expenses You can generally deduct hobby expenses, but only up to the amount of hobby income. H&r block 1040ez free A hobby is not a business because it is not carried on to make a profit. H&r block 1040ez free See Activity not for profit in chapter 12 under Other Income. H&r block 1040ez free Indirect Deductions of Pass-Through Entities Pass-through entities include partnerships, S corporations, and mutual funds that are not publicly offered. H&r block 1040ez free Deductions of pass-through entities are passed through to the partners or shareholders. H&r block 1040ez free The partners or shareholders can deduct their share of passed-through deductions for investment expenses as miscellaneous itemized deductions subject to the 2% limit. H&r block 1040ez free Example. H&r block 1040ez free You are a member of an investment club that is formed solely to invest in securities. H&r block 1040ez free The club is treated as a partnership. H&r block 1040ez free The partnership's income is solely from taxable dividends, interest, and gains from sales of securities. H&r block 1040ez free In this case, you can deduct your share of the partnership's operating expenses as miscellaneous itemized deductions subject to the 2% limit. H&r block 1040ez free However, if the investment club partnership has investments that also produce nontaxable income, you cannot deduct your share of the partnership's expenses that produce the nontaxable income. H&r block 1040ez free Publicly offered mutual funds. H&r block 1040ez free   Publicly offered mutual funds do not pass deductions for investment expenses through to shareholders. H&r block 1040ez free A mutual fund is “publicly offered” if it is: Continuously offered pursuant to a public offering, Regularly traded on an established securities market, or Held by or for at least 500 persons at all times during the tax year. H&r block 1040ez free   A publicly offered mutual fund will send you a Form 1099-DIV, Dividends and Distributions, or a substitute form, showing the net amount of dividend income (gross dividends minus investment expenses). H&r block 1040ez free This net figure is the amount you report on your return as income. H&r block 1040ez free You cannot further deduct investment expenses related to publicly offered mutual funds because they are already included as part of the net income amount. H&r block 1040ez free Information returns. H&r block 1040ez free   You should receive information returns from pass-through entities. H&r block 1040ez free Partnerships and S corporations. H&r block 1040ez free   These entities issue Schedule K-1, which lists the items and amounts you must report and identifies the tax return schedules and lines to use. H&r block 1040ez free Nonpublicly offered mutual funds. H&r block 1040ez free   These funds will send you a Form 1099-DIV, Dividends and Distributions, or a substitute form, showing your share of gross income and investment expenses. H&r block 1040ez free You can claim the expenses only as a miscellaneous itemized deduction subject to the 2% limit. H&r block 1040ez free Investment Fees and Expenses You can deduct investment fees, custodial fees, trust administration fees, and other expenses you paid for managing your investments that produce taxable income. H&r block 1040ez free Legal Expenses You can usually deduct legal expenses that you incur in attempting to produce or collect taxable income or that you pay in connection with the determination, collection, or refund of any tax. H&r block 1040ez free You can also deduct legal expenses that are: Related to either doing or keeping your job, such as those you paid to defend yourself against criminal charges arising out of your trade or business, For tax advice related to a divorce, if the bill specifies how much is for tax advice and it is determined in a reasonable way, or To collect taxable alimony. H&r block 1040ez free You can deduct expenses of resolving tax issues relating to profit or loss from business (Schedule C or C-EZ), rentals or royalties (Schedule E), or farm income and expenses (Schedule F), on the appropriate schedule. H&r block 1040ez free You deduct expenses of resolving nonbusiness tax issues on Schedule A (Form 1040). H&r block 1040ez free See Tax Preparation Fees , earlier. H&r block 1040ez free Loss on Deposits For information on whether, and if so, how, you may deduct a loss on your deposit in a qualified financial institution, see Loss on Deposits in chapter 25. H&r block 1040ez free Repayments of Income If you had to repay an amount that you included in income in an earlier year, you may be able to deduct the amount you repaid. H&r block 1040ez free If the amount you had to repay was ordinary income of $3,000 or less, the deduction is subject to the 2% limit. H&r block 1040ez free If it was more than $3,000, see Repayments Under Claim of Right under Deductions Not Subject to the 2% Limit, later. H&r block 1040ez free Repayments of Social Security Benefits For information on how to deduct your repayments of certain social security benefits, see Repayments More Than Gross Benefits in chapter 11. H&r block 1040ez free Safe Deposit Box Rent You can deduct safe deposit box rent if you use the box to store taxable income-producing stocks, bonds, or investment-related papers and documents. H&r block 1040ez free You cannot deduct the rent if you use the box only for jewelry, other personal items, or tax-exempt securities. H&r block 1040ez free Service Charges on Dividend Reinvestment Plans You can deduct service charges you pay as a subscriber in a dividend reinvestment plan. H&r block 1040ez free These service charges include payments for: Holding shares acquired through a plan, Collecting and reinvesting cash dividends, and Keeping individual records and providing detailed statements of accounts. H&r block 1040ez free Trustee's Administrative Fees for IRA Trustee's administrative fees that are billed separately and paid by you in connection with your individual retirement arrangement (IRA) are deductible (if they are ordinary and necessary) as a miscellaneous itemized deduction subject to the 2% limit. H&r block 1040ez free For more information about IRAs, see chapter 17. H&r block 1040ez free Deductions Not Subject to the 2% Limit You can deduct the items listed below as miscellaneous itemized deductions. H&r block 1040ez free They are not subject to the 2% limit. H&r block 1040ez free Report these items on Schedule A (Form 1040), line 28. H&r block 1040ez free List of Deductions Each of the following items is discussed in detail after the list (except where indicated). H&r block 1040ez free Amortizable premium on taxable bonds. H&r block 1040ez free Casualty and theft losses from income- producing property. H&r block 1040ez free Federal estate tax on income in respect of a decedent. H&r block 1040ez free Gambling losses up to the amount of gambling winnings. H&r block 1040ez free Impairment-related work expenses of persons with disabilities. H&r block 1040ez free Loss from other activities from Schedule K-1 (Form 1065-B), box 2. H&r block 1040ez free Losses from Ponzi-type investment schemes. H&r block 1040ez free See Losses from Ponzi-type investment schemes under Theft in chapter 25. H&r block 1040ez free Repayments of more than $3,000 under a claim of right. H&r block 1040ez free Unrecovered investment in an annuity. H&r block 1040ez free Amortizable Premium on Taxable Bonds In general, if the amount you pay for a bond is greater than its stated principal amount, the excess is bond premium. H&r block 1040ez free You can elect to amortize the premium on taxable bonds. H&r block 1040ez free The amortization of the premium is generally an offset to interest income on the bond rather than a separate deduction item. H&r block 1040ez free Part of the premium on some bonds may be a miscellaneous deduction not subject to the 2% limit. H&r block 1040ez free For more information, see Amortizable Premium on Taxable Bonds in Publication 529, and Bond Premium Amortization in chapter 3 of Publication 550, Investment Income and Expenses. H&r block 1040ez free Casualty and Theft Losses of Income-Producing Property You can deduct a casualty or theft loss as a miscellaneous itemized deduction not subject to the 2% limit if the damaged or stolen property was income-producing property (property held for investment, such as stocks, notes, bonds, gold, silver, vacant lots, and works of art). H&r block 1040ez free First, report the loss in Form 4684, Section B. H&r block 1040ez free You may also have to include the loss on Form 4797, Sales of Business Property if you are otherwise required to file that form. H&r block 1040ez free To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 32 and 38b, or Form 4797, line 18a. H&r block 1040ez free For more information on casualty and theft losses, see chapter 25. H&r block 1040ez free Federal Estate Tax on Income in Respect of a Decedent You can deduct the federal estate tax attributable to income in respect of a decedent that you as a beneficiary include in your gross income. H&r block 1040ez free Income in respect of the decedent is gross income that the decedent would have received had death not occurred and that was not properly includible in the decedent's final income tax return. H&r block 1040ez free See Publication 559 for more information. H&r block 1040ez free Gambling Losses Up to the Amount of Gambling Winnings You must report the full amount of your gambling winnings for the year on Form 1040, line 21. H&r block 1040ez free You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. H&r block 1040ez free You cannot deduct gambling losses that are more than your winnings. H&r block 1040ez free You cannot reduce your gambling winnings by your gambling losses and report the difference. H&r block 1040ez free You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. H&r block 1040ez free Therefore, your records should show your winnings separately from your losses. H&r block 1040ez free Diary of winnings and losses. H&r block 1040ez free You must keep an accurate diary or similar record of your losses and winnings. H&r block 1040ez free Your diary should contain at least the following information. H&r block 1040ez free The date and type of your specific wager or wagering activity. H&r block 1040ez free The name and address or location of the gambling establishment. H&r block 1040ez free The names of other persons present with you at the gambling establishment. H&r block 1040ez free The amount(s) you won or lost. H&r block 1040ez free See Publication 529 for more information. H&r block 1040ez free Impairment-Related Work Expenses If you have a physical or mental disability that limits your being employed, or substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, and working, you can deduct your impairment-related work expenses. H&r block 1040ez free Impairment-related work expenses are ordinary and necessary business expenses for attendant care services at your place of work and for other expenses in connection with your place of work that are necessary for you to be able to work. H&r block 1040ez free Self-employed. H&r block 1040ez free   If you are self-employed, enter your impairment-related work expenses on the appropriate form (Schedule C, C-EZ, E, or F) used to report your business income and expenses. H&r block 1040ez free Loss From Other Activities From Schedule K-1 (Form 1065-B), Box 2 If the amount reported in Schedule K-1 (Form 1065-B), box 2, is a loss, report it on Schedule A (Form 1040), line 28. H&r block 1040ez free It is not subject to the passive activity limitations. H&r block 1040ez free Repayments Under Claim of Right If you had to repay more than $3,000 that you included in your income in an earlier year because at the time you thought you had an unrestricted right to it, you may be able to deduct the amount you repaid or take a credit against your tax. H&r block 1040ez free See Repayments in chapter 12 for more information. H&r block 1040ez free Unrecovered Investment in Annuity A retiree who contributed to the cost of an annuity can exclude from income a part of each payment received as a tax-free return of the retiree's investment. H&r block 1040ez free If the retiree dies before the entire investment is recovered tax free, any unrecovered investment can be deducted on the retiree's final income tax return. H&r block 1040ez free See chapter 10 for more information about the tax treatment of pensions and annuities. H&r block 1040ez free Nondeductible Expenses Examples of nondeductible expenses are listed next. H&r block 1040ez free The list is followed by discussions of additional nondeductible expenses. H&r block 1040ez free List of Nondeductible Expenses Broker's commissions that you paid in connection with your IRA or other investment property. H&r block 1040ez free Burial or funeral expenses, including the cost of a cemetery lot. H&r block 1040ez free Capital expenses. H&r block 1040ez free Fees and licenses, such as car licenses, marriage licenses, and dog tags. H&r block 1040ez free Hobby losses, but see Hobby Expenses , earlier. H&r block 1040ez free Home repairs, insurance, and rent. H&r block 1040ez free Illegal bribes and kickbacks. H&r block 1040ez free See Bribes and kickbacks in chapter 11 of Publication 535. H&r block 1040ez free Losses from the sale of your home, furniture, personal car, etc. H&r block 1040ez free Personal disability insurance premiums. H&r block 1040ez free Personal, living, or family expenses. H&r block 1040ez free The value of wages never received or lost vacation time. H&r block 1040ez free Adoption Expenses You cannot deduct the expenses of adopting a child, but you may be able to take a credit for those expenses. H&r block 1040ez free See chapter 37. H&r block 1040ez free Campaign Expenses You cannot deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to the office. H&r block 1040ez free These include qualification and registration fees for primary elections. H&r block 1040ez free Legal fees. H&r block 1040ez free   You cannot deduct legal fees paid to defend charges that arise from participation in a political campaign. H&r block 1040ez free Check-Writing Fees on Personal Account If you have a personal checking account, you cannot deduct fees charged by the bank for the privilege of writing checks, even if the account pays interest. H&r block 1040ez free Club Dues Generally, you cannot deduct the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. H&r block 1040ez free This includes business, social, athletic, luncheon, sporting, airline, hotel, golf, and country clubs. H&r block 1040ez free You cannot deduct dues paid to an organization if one of its main purposes is to: Conduct entertainment activities for members or their guests, or Provide members or their guests with access to entertainment facilities. H&r block 1040ez free Dues paid to airline, hotel, and luncheon clubs are not deductible. H&r block 1040ez free Commuting Expenses You cannot deduct commuting expenses (the cost of transportation between your home and your main or regular place of work). H&r block 1040ez free If you haul tools, instruments, or other items, in your car to and from work, you can deduct only the additional cost of hauling the items such as the rent on a trailer to carry the items. H&r block 1040ez free Fines or Penalties You cannot deduct fines or penalties you pay to a governmental unit for violating a law. H&r block 1040ez free This includes an amount paid in settlement of your actual or potential liability for a fine or penalty (civil or criminal). H&r block 1040ez free Fines or penalties include parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike. H&r block 1040ez free Health Spa Expenses You cannot deduct health spa expenses, even if there is a job requirement to stay in excellent physical condition, such as might be required of a law enforcement officer. H&r block 1040ez free Home Security System You cannot deduct the cost of a home security system as a miscellaneous deduction. H&r block 1040ez free However, you may be able to claim a deduction for a home security system as a business expense if you have a home office. H&r block 1040ez free See Home Office under Unreimbursed Employee Expenses, earlier, and Security System under Deducting Expenses in Publication 587. H&r block 1040ez free Investment-Related Seminars You cannot deduct any expenses for attending a convention, seminar, or similar meeting for investment purposes. H&r block 1040ez free Life Insurance Premiums You cannot deduct premiums you pay on your life insurance. H&r block 1040ez free You may be able to deduct, as alimony, premiums you pay on life insurance policies assigned to your former spouse. H&r block 1040ez free See chapter 18 for information on alimony. H&r block 1040ez free Lobbying Expenses You generally cannot deduct amounts paid or incurred for lobbying expenses. H&r block 1040ez free These include expenses to: Influence legislation, Participate or intervene in any political campaign for, or against, any candidate for public office, Attempt to influence the general public, or segments of the public, about elections, legislative matters, or referendums, or Communicate directly with covered executive branch officials in any attempt to influence the official actions or positions of those officials. H&r block 1040ez free Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordination of any of these activities. H&r block 1040ez free Dues used for lobbying. H&r block 1040ez free   If a tax-exempt organization notifies you that part of the dues or other amounts you pay to the organization are used to pay nondeductible lobbying expenses, you cannot deduct that part. H&r block 1040ez free See Lobbying Expenses in Publication 529 for information on exceptions. H&r block 1040ez free Lost or Mislaid Cash or Property You cannot deduct a loss based on the mere disappearance of money or property. H&r block 1040ez free However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. H&r block 1040ez free See chapter 25. H&r block 1040ez free Example. H&r block 1040ez free A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. H&r block 1040ez free The diamond falls from the ring and is never found. H&r block 1040ez free The loss of the diamond is a casualty. H&r block 1040ez free Lunches with Co-workers You cannot deduct the expenses of lunches with co-workers, except while traveling away from home on business. H&r block 1040ez free See chapter 26 for information on deductible expenses while traveling away from home. H&r block 1040ez free Meals While Working Late You cannot deduct the cost of meals while working late. H&r block 1040ez free However, you may be able to claim a deduction if the cost of meals is a deductible entertainment expense, or if you are traveling away from home. H&r block 1040ez free See chapter 26 for information on deductible entertainment expenses and expenses while traveling away from home. H&r block 1040ez free Personal Legal Expenses You cannot deduct personal legal expenses such as those for the following. H&r block 1040ez free Custody of children. H&r block 1040ez free Breach of promise to marry suit. H&r block 1040ez free Civil or criminal charges resulting from a personal relationship. H&r block 1040ez free Damages for personal injury, except for certain unlawful discrimination and whistleblower claims. H&r block 1040ez free Preparation of a title (or defense or perfection of a title). H&r block 1040ez free Preparation of a will. H&r block 1040ez free Property claims or property settlement in a divorce. H&r block 1040ez free You cannot deduct these expenses even if a result of the legal proceeding is the loss of income-producing property. H&r block 1040ez free Political Contributions You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. H&r block 1040ez free Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible. H&r block 1040ez free Professional Accreditation Fees You cannot deduct professional accreditation fees such as the following. H&r block 1040ez free Accounting certificate fees paid for the initial right to practice accounting. H&r block 1040ez free Bar exam fees and incidental expenses in securing initial admission to the bar. H&r block 1040ez free Medical and dental license fees paid to get initial licensing. H&r block 1040ez free Professional Reputation You cannot deduct expenses of radio and TV appearances to increase your personal prestige or establish your professional reputation. H&r block 1040ez free Relief Fund Contributions You cannot deduct contributions paid to a private plan that pays benefits to any covered employee who cannot work because of any injury or illness not related to the job. H&r block 1040ez free Residential Telephone Service You cannot deduct any charge (including taxes) for basic local telephone service for the first telephone line to your residence, even if it is used in a trade or business. H&r block 1040ez free Stockholders' Meetings You cannot deduct transportation and other expenses you pay to attend stockholders' meetings of companies in which you own stock but have no other interest. H&r block 1040ez free You cannot deduct these expenses even if you are attending the meeting to get information that would be useful in making further investments. H&r block 1040ez free Tax-Exempt Income Expenses You cannot deduct expenses to produce tax-exempt income. H&r block 1040ez free You cannot deduct interest on a debt incurred or continued to buy or carry  tax-exempt securities. H&r block 1040ez free If you have expenses to produce both taxable and tax-exempt income, but you cannot identify the expenses that produce each type of income, you must divide the expenses based on the amount of each type of income to determine the amount that you can deduct. H&r block 1040ez free Example. H&r block 1040ez free During the year, you received taxable interest of $4,800 and tax-exempt interest of $1,200. H&r block 1040ez free In earning this income, you had total expenses of $500 during the year. H&r block 1040ez free You cannot identify the amount of each expense item that is for each income item. H&r block 1040ez free Therefore, 80% ($4,800/$6,000) of the expense is for the taxable interest and 20% ($1,200/$6,000) is for the tax-exempt interest. H&r block 1040ez free You can deduct, subject to the 2% limit, expenses of $400 (80% of $500). H&r block 1040ez free Travel Expenses for Another Individual You generally cannot deduct travel expenses you pay or incur for a spouse, dependent, or other individual who accompanies you (or your employee) on business or personal travel unless the spouse, dependent, or other individual is an employee of the taxpayer, the travel is for a bona fide business purpose, and such expenses would otherwise be deductible by the spouse, dependent, or other individual. H&r block 1040ez free See chapter 26 for more information on deductible travel expenses. H&r block 1040ez free Voluntary Unemployment Benefit Fund Contributions You cannot deduct voluntary unemployment benefit fund contributions you make to a union fund or a private fund. H&r block 1040ez free However, you can deduct contributions as taxes if state law requires you to make them to a state unemployment fund that covers you for the loss of wages from unemployment caused by business conditions. H&r block 1040ez free Wristwatches You cannot deduct the cost of a wristwatch, even if there is a job requirement that you know the correct time to properly perform your duties. H&r block 1040ez free Prev  Up  Next   Home   More Online Publications