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Tax Rates And Tables

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Tax Rates And Tables

Tax rates and tables 3. Tax rates and tables   Rent Expense Table of Contents Introduction Topics - This chapter discusses: RentConditional sales contract. Tax rates and tables Leveraged leases. Tax rates and tables Leveraged leases of limited-use property. Tax rates and tables Taxes on Leased Property Cost of Getting a Lease Improvements by Lessee Capitalizing Rent Expenses Introduction This chapter discusses the tax treatment of rent or lease payments you make for property you use in your business but do not own. Tax rates and tables It also discusses how to treat other kinds of payments you make that are related to your use of this property. Tax rates and tables These include payments you make for taxes on the property. Tax rates and tables Topics - This chapter discusses: The definition of rent Taxes on leased property The cost of getting a lease Improvements by the lessee Capitalizing rent expenses Rent Rent is any amount you pay for the use of property you do not own. Tax rates and tables In general, you can deduct rent as an expense only if the rent is for property you use in your trade or business. Tax rates and tables If you have or will receive equity in or title to the property, the rent is not deductible. Tax rates and tables Unreasonable rent. Tax rates and tables   You cannot take a rental deduction for unreasonable rent. Tax rates and tables Ordinarily, the issue of reasonableness arises only if you and the lessor are related. Tax rates and tables Rent paid to a related person is reasonable if it is the same amount you would pay to a stranger for use of the same property. Tax rates and tables Rent is not unreasonable just because it is figured as a percentage of gross sales. Tax rates and tables For examples of related persons, see Related persons in chapter 2, Publication 544. Tax rates and tables Rent on your home. Tax rates and tables   If you rent your home and use part of it as your place of business, you may be able to deduct the rent you pay for that part. Tax rates and tables You must meet the requirements for business use of your home. Tax rates and tables For more information, see Business use of your home in chapter 1. Tax rates and tables Rent paid in advance. Tax rates and tables   Generally, rent paid in your trade or business is deductible in the year paid or accrued. Tax rates and tables If you pay rent in advance, you can deduct only the amount that applies to your use of the rented property during the tax year. Tax rates and tables You can deduct the rest of your payment only over the period to which it applies. Tax rates and tables Example 1. Tax rates and tables You are a calendar year taxpayer and you leased a building for 5 years beginning July 1. Tax rates and tables Your rent is $12,000 per year. Tax rates and tables You paid the first year's rent ($12,000) on June 30. Tax rates and tables You can deduct only $6,000 (6/12 × $12,000) for the rent that applies to the first year. Tax rates and tables Example 2. Tax rates and tables You are a calendar year taxpayer. Tax rates and tables Last January you leased property for 3 years for $6,000 a year. Tax rates and tables You paid the full $18,000 (3 × $6,000) during the first year of the lease. Tax rates and tables Each year you can deduct only $6,000, the part of the lease that applies to that year. Tax rates and tables Canceling a lease. Tax rates and tables   You generally can deduct as rent an amount you pay to cancel a business lease. Tax rates and tables Lease or purchase. Tax rates and tables   There may be instances in which you must determine whether your payments are for rent or for the purchase of the property. Tax rates and tables You must first determine whether your agreement is a lease or a conditional sales contract. Tax rates and tables Payments made under a conditional sales contract are not deductible as rent expense. Tax rates and tables Conditional sales contract. Tax rates and tables   Whether an agreement is a conditional sales contract depends on the intent of the parties. Tax rates and tables Determine intent based on the provisions of the agreement and the facts and circumstances that exist when you make the agreement. Tax rates and tables No single test, or special combination of tests, always applies. Tax rates and tables However, in general, an agreement may be considered a conditional sales contract rather than a lease if any of the following is true. Tax rates and tables The agreement applies part of each payment toward an equity interest you will receive. Tax rates and tables You get title to the property after you make a stated amount of required payments. Tax rates and tables The amount you must pay to use the property for a short time is a large part of the amount you would pay to get title to the property. Tax rates and tables You pay much more than the current fair rental value of the property. Tax rates and tables You have an option to buy the property at a nominal price compared to the value of the property when you may exercise the option. Tax rates and tables Determine this value when you make the agreement. Tax rates and tables You have an option to buy the property at a nominal price compared to the total amount you have to pay under the agreement. Tax rates and tables The agreement designates part of the payments as interest, or that part is easy to recognize as interest. Tax rates and tables Leveraged leases. Tax rates and tables   Leveraged lease transactions may not be considered leases. Tax rates and tables Leveraged leases generally involve three parties: a lessor, a lessee, and a lender to the lessor. Tax rates and tables Usually the lease term covers a large part of the useful life of the leased property, and the lessee's payments to the lessor are enough to cover the lessor's payments to the lender. Tax rates and tables   If you plan to take part in what appears to be a leveraged lease, you may want to get an advance ruling. Tax rates and tables Revenue Procedure 2001-28 on page 1156 of Internal Revenue Bulletin 2001-19 contains the guidelines the IRS will use to determine if a leveraged lease is a lease for federal income tax purposes. Tax rates and tables Revenue Procedure 2001-29 on page 1160 of the same Internal Revenue Bulletin provides the information required to be furnished in a request for an advance ruling on a leveraged lease transaction. Tax rates and tables Internal Revenue Bulletin 2001-19 is available at www. Tax rates and tables irs. Tax rates and tables gov/pub/irs-irbs/irb01-19. Tax rates and tables pdf. Tax rates and tables   In general, Revenue Procedure 2001-28 provides that, for advance ruling purposes only, the IRS will consider the lessor in a leveraged lease transaction to be the owner of the property and the transaction to be a valid lease if all the factors in the revenue procedure are met, including the following. Tax rates and tables The lessor must maintain a minimum unconditional “at risk” equity investment in the property (at least 20% of the cost of the property) during the entire lease term. Tax rates and tables The lessee may not have a contractual right to buy the property from the lessor at less than fair market value when the right is exercised. Tax rates and tables The lessee may not invest in the property, except as provided by Revenue Procedure 2001-28. Tax rates and tables The lessee may not lend any money to the lessor to buy the property or guarantee the loan used by the lessor to buy the property. Tax rates and tables The lessor must show that it expects to receive a profit apart from the tax deductions, allowances, credits, and other tax attributes. Tax rates and tables   The IRS may charge you a user fee for issuing a tax ruling. Tax rates and tables For more information, see Revenue Procedure 2014-1 available at  www. Tax rates and tables irs. Tax rates and tables gov/irb/2014-1_IRB/ar05. Tax rates and tables html. Tax rates and tables Leveraged leases of limited-use property. Tax rates and tables   The IRS will not issue advance rulings on leveraged leases of so-called limited-use property. Tax rates and tables Limited-use property is property not expected to be either useful to or usable by a lessor at the end of the lease term except for continued leasing or transfer to a lessee. Tax rates and tables See Revenue Procedure 2001-28 for examples of limited-use property and property that is not limited-use property. Tax rates and tables Leases over $250,000. Tax rates and tables   Special rules are provided for certain leases of tangible property. Tax rates and tables The rules apply if the lease calls for total payments of more than $250,000 and any of the following apply. Tax rates and tables Rents increase during the lease. Tax rates and tables Rents decrease during the lease. Tax rates and tables Rents are deferred (rent is payable after the end of the calendar year following the calendar year in which the use occurs and the rent is allocated). Tax rates and tables Rents are prepaid (rent is payable before the end of the calendar year preceding the calendar year in which the use occurs and the rent is allocated). Tax rates and tables These rules do not apply if your lease specifies equal amounts of rent for each month in the lease term and all rent payments are due in the calendar year to which the rent relates (or in the preceding or following calendar year). Tax rates and tables   Generally, if the special rules apply, you must use an accrual method of accounting (and time value of money principles) for your rental expenses, regardless of your overall method of accounting. Tax rates and tables In addition, in certain cases in which the IRS has determined that a lease was designed to achieve tax avoidance, you must take rent and stated or imputed interest into account under a constant rental accrual method in which the rent is treated as accruing ratably over the entire lease term. Tax rates and tables For details, see section 467 of the Internal Revenue Code. Tax rates and tables Taxes on Leased Property If you lease business property, you can deduct as additional rent any taxes you have to pay to or for the lessor. Tax rates and tables When you can deduct these taxes as additional rent depends on your accounting method. Tax rates and tables Cash method. Tax rates and tables   If you use the cash method of accounting, you can deduct the taxes as additional rent only for the tax year in which you pay them. Tax rates and tables Accrual method. Tax rates and tables   If you use an accrual method of accounting, you can deduct taxes as additional rent for the tax year in which you can determine all the following. Tax rates and tables That you have a liability for taxes on the leased property. Tax rates and tables How much the liability is. Tax rates and tables That economic performance occurred. Tax rates and tables   The liability and amount of taxes are determined by state or local law and the lease agreement. Tax rates and tables Economic performance occurs as you use the property. Tax rates and tables Example 1. Tax rates and tables Oak Corporation is a calendar year taxpayer that uses an accrual method of accounting. Tax rates and tables Oak leases land for use in its business. Tax rates and tables Under state law, owners of real property become liable (incur a lien on the property) for real estate taxes for the year on January 1 of that year. Tax rates and tables However, they do not have to pay these taxes until July 1 of the next year (18 months later) when tax bills are issued. Tax rates and tables Under the terms of the lease, Oak becomes liable for the real estate taxes in the later year when the tax bills are issued. Tax rates and tables If the lease ends before the tax bill for a year is issued, Oak is not liable for the taxes for that year. Tax rates and tables Oak cannot deduct the real estate taxes as rent until the tax bill is issued. Tax rates and tables This is when Oak's liability under the lease becomes fixed. Tax rates and tables Example 2. Tax rates and tables The facts are the same as in Example 1 except that, according to the terms of the lease, Oak becomes liable for the real estate taxes when the owner of the property becomes liable for them. Tax rates and tables As a result, Oak will deduct the real estate taxes as rent on its tax return for the earlier year. Tax rates and tables This is the year in which Oak's liability under the lease becomes fixed. Tax rates and tables Cost of Getting a Lease You may either enter into a new lease with the lessor of the property or get an existing lease from another lessee. Tax rates and tables Very often when you get an existing lease from another lessee, you must pay the previous lessee money to get the lease, besides having to pay the rent on the lease. Tax rates and tables If you get an existing lease on property or equipment for your business, you generally must amortize any amount you pay to get that lease over the remaining term of the lease. Tax rates and tables For example, if you pay $10,000 to get a lease and there are 10 years remaining on the lease with no option to renew, you can deduct $1,000 each year. Tax rates and tables The cost of getting an existing lease of tangible property is not subject to the amortization rules for section 197 intangibles discussed in chapter 8. Tax rates and tables Option to renew. Tax rates and tables   The term of the lease for amortization includes all renewal options plus any other period for which you and the lessor reasonably expect the lease to be renewed. Tax rates and tables However, this applies only if less than 75% of the cost of getting the lease is for the term remaining on the purchase date (not including any period for which you may choose to renew, extend, or continue the lease). Tax rates and tables Allocate the lease cost to the original term and any option term based on the facts and circumstances. Tax rates and tables In some cases, it may be appropriate to make the allocation using a present value computation. Tax rates and tables For more information, see Regulations section 1. Tax rates and tables 178-1(b)(5). Tax rates and tables Example 1. Tax rates and tables You paid $10,000 to get a lease with 20 years remaining on it and two options to renew for 5 years each. Tax rates and tables Of this cost, you paid $7,000 for the original lease and $3,000 for the renewal options. Tax rates and tables Because $7,000 is less than 75% of the total $10,000 cost of the lease (or $7,500), you must amortize the $10,000 over 30 years. Tax rates and tables That is the remaining life of your present lease plus the periods for renewal. Tax rates and tables Example 2. Tax rates and tables The facts are the same as in Example 1, except that you paid $8,000 for the original lease and $2,000 for the renewal options. Tax rates and tables You can amortize the entire $10,000 over the 20-year remaining life of the original lease. Tax rates and tables The $8,000 cost of getting the original lease was not less than 75% of the total cost of the lease (or $7,500). Tax rates and tables Cost of a modification agreement. Tax rates and tables   You may have to pay an additional “rent” amount over part of the lease period to change certain provisions in your lease. Tax rates and tables You must capitalize these payments and amortize them over the remaining period of the lease. Tax rates and tables You cannot deduct the payments as additional rent, even if they are described as rent in the agreement. Tax rates and tables Example. Tax rates and tables You are a calendar year taxpayer and sign a 20-year lease to rent part of a building starting on January 1. Tax rates and tables However, before you occupy it, you decide that you really need less space. Tax rates and tables The lessor agrees to reduce your rent from $7,000 to $6,000 per year and to release the excess space from the original lease. Tax rates and tables In exchange, you agree to pay an additional rent amount of $3,000, payable in 60 monthly installments of $50 each. Tax rates and tables   You must capitalize the $3,000 and amortize it over the 20-year term of the lease. Tax rates and tables Your amortization deduction each year will be $150 ($3,000 ÷ 20). Tax rates and tables You cannot deduct the $600 (12 × $50) that you will pay during each of the first 5 years as rent. Tax rates and tables Commissions, bonuses, and fees. Tax rates and tables   Commissions, bonuses, fees, and other amounts you pay to get a lease on property you use in your business are capital costs. Tax rates and tables You must amortize these costs over the term of the lease. Tax rates and tables Loss on merchandise and fixtures. Tax rates and tables   If you sell at a loss merchandise and fixtures that you bought solely to get a lease, the loss is a cost of getting the lease. Tax rates and tables You must capitalize the loss and amortize it over the remaining term of the lease. Tax rates and tables Improvements by Lessee If you add buildings or make other permanent improvements to leased property, depreciate the cost of the improvements using the modified accelerated cost recovery system (MACRS). Tax rates and tables Depreciate the property over its appropriate recovery period. Tax rates and tables You cannot amortize the cost over the remaining term of the lease. Tax rates and tables If you do not keep the improvements when you end the lease, figure your gain or loss based on your adjusted basis in the improvements at that time. Tax rates and tables For more information, see the discussion of MACRS in Publication 946, How To Depreciate Property. Tax rates and tables Assignment of a lease. Tax rates and tables   If a long-term lessee who makes permanent improvements to land later assigns all lease rights to you for money and you pay the rent required by the lease, the amount you pay for the assignment is a capital investment. Tax rates and tables If the rental value of the leased land increased since the lease began, part of your capital investment is for that increase in the rental value. Tax rates and tables The rest is for your investment in the permanent improvements. Tax rates and tables   The part that is for the increased rental value of the land is a cost of getting a lease, and you amortize it over the remaining term of the lease. Tax rates and tables You can depreciate the part that is for your investment in the improvements over the recovery period of the property as discussed earlier, without regard to the lease term. Tax rates and tables Capitalizing Rent Expenses Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. Tax rates and tables Include these costs in the basis of property you produce or acquire for resale, rather than claiming them as a current deduction. Tax rates and tables You recover the costs through depreciation, amortization, or cost of goods sold when you use, sell, or otherwise dispose of the property. Tax rates and tables Indirect costs include amounts incurred for renting or leasing equipment, facilities, or land. Tax rates and tables Uniform capitalization rules. Tax rates and tables   You may be subject to the uniform capitalization rules if you do any of the following, unless the property is produced for your use other than in a business or an activity carried on for profit. Tax rates and tables Produce real property or tangible personal property. Tax rates and tables For this purpose, tangible personal property includes a film, sound recording, video tape, book, or similar property. Tax rates and tables Acquire property for resale. Tax rates and tables However, these rules do not apply to the following property. Tax rates and tables Personal property you acquire for resale if your average annual gross receipts are $10 million or less for the 3 prior tax years. Tax rates and tables Property you produce if you meet either of the following conditions. Tax rates and tables Your indirect costs of producing the property are $200,000 or less. Tax rates and tables You use the cash method of accounting and do not account for inventories. Tax rates and tables Example 1. Tax rates and tables You rent construction equipment to build a storage facility. Tax rates and tables If you are subject to the uniform capitalization rules, you must capitalize as part of the cost of the building the rent you paid for the equipment. Tax rates and tables You recover your cost by claiming a deduction for depreciation on the building. Tax rates and tables Example 2. Tax rates and tables You rent space in a facility to conduct your business of manufacturing tools. Tax rates and tables If you are subject to the uniform capitalization rules, you must include the rent you paid to occupy the facility in the cost of the tools you produce. Tax rates and tables More information. Tax rates and tables   For more information on these rules, see Uniform Capitalization Rules in Publication 538 and the regulations under Internal Revenue Code section 263A. Tax rates and tables Prev  Up  Next   Home   More Online Publications
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Understanding your 2801C Letter

You received this letter because we determined that you’re not entitled to claim exempt status or more than a specified number of withholding allowances. Generally, your employer bases the amount of withholding for federal income tax on your Form W-4, Employee's Withholding Allowance Certificate. However, we can review whether you are entitled to claim exempt status or a certain number of withholding allowances.

What you need to do

  • You can ask us to change our decision. Please call us at the number shown below within 30 days from the date of the letter. We will consider your explanation of why you believe you are entitled to a different withholding rate or number of withholding allowances (or exempt status)
  • When you call, have the following information available. If you file jointly, you must have the same information available for your spouse
    • Form W-4 and worksheets. (You must complete the "Two Earners Multiple Jobs Worksheet" on the back of the Form W-4, if you have more than one job or your spouse works.)
    • Most current pay stubs for all jobs
    • Number of withholding allowances you (and your spouse) are claiming on your Form(s) W-4.
    • The social security number and date of birth for any dependent you are entitled to claim
    • A copy of the current tax return due, including all schedules, forms, and attachments

  • If you prefer you can write us at the address below and ask for a redetermination. You must send the information listed above to support your claim that you’re entitled to a different withholding rate (marital status) or number of withholding allowances (or exempt status)

You may want to…

  • Search keyword “withholding compliance” for more information on income tax withholding
  • Download the following materials:
    • Form W-4, Employee’s Withholding Allowance Certificate
    • Publication 505, Tax Withholding and Estimated Tax
  • Use the IRS Withholding Calculator to figure your correct amount of federal income tax withholding. The calculator is particularly helpful if you've had too much or too little withheld in the past, your situation has changed, or you’re starting a new job.

Answers to Common Questions

What happens if the IRS determines that I do not have adequate withholding?
We can tell your employer to withhold federal income tax at an increased rate. We do this by issuing a “lock-in letter.” At that point, your employer must disregard any Form W-4 that decreases the amount of your withholding. You’ll receive a copy of the lock-in letter, and we’ll give you some time before the lock-in rate is effective to submit a new Form W-4. This form must include a statement that explains why you believe you’re entitled to a different withholding rate or number of withholding allowances. You should send your Form W-4 and supporting documents to the IRS address as shown on this webpage. Once we issue a lock-in letter, you won’t be able to decrease your withholding unless we approve it.

What if I don’t want to submit a Form W-4 to my employer?
Your employer must withhold income tax from your wages as if you’re single with zero allowances.

How to get help

  • Call toll free 1-855-839-2235 weekdays between 8:00 a.m. and 8:00 p.m.
  • Send a fax to 1-855-202-8300
  • Write to:

    Internal Revenue Service
    Compliance Services
    Withholding Compliance Unit
    P.O. Box 9047, Stop 837
    Andover, MA 01810-0
Page Last Reviewed or Updated: 26-Sep-2013

The Tax Rates And Tables

Tax rates and tables Publication 529 - Main Content Table of Contents Deductions Subject to the 2% LimitUnreimbursed Employee Expenses Tax Preparation Fees Other Expenses Deductions Not Subject to the 2% LimitList of Deductions Nondeductible ExpensesList of Nondeductible Expenses How To ReportWho can use Form 2106-EZ. Tax rates and tables Computer used in a home office. Tax rates and tables Example How To Get Tax HelpLow Income Taxpayer Clinics Deductions Subject to the 2% Limit You can deduct certain expenses as miscellaneous itemized deductions on Schedule A (Form 1040 or Form 1040NR). Tax rates and tables You can claim the amount of expenses that is more than 2% of your adjusted gross income. Tax rates and tables You figure your deduction on Schedule A by subtracting 2% of your adjusted gross income from the total amount of these expenses. Tax rates and tables Your adjusted gross income is the amount on Form 1040, line 38, or Form 1040NR, line 37. Tax rates and tables Generally, you apply the 2% limit after you apply any other deduction limit. Tax rates and tables For example, you apply the 50% (or 80%) limit on business-related meals and entertainment (discussed later under Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging ) before you apply the 2% limit. Tax rates and tables Deductions subject to the 2% limit are discussed in the following three categories. Tax rates and tables Unreimbursed employee expenses (Schedule A (Form 1040), line 21 or Schedule A (Form 1040NR), line 7). Tax rates and tables Tax preparation fees (Schedule A (Form 1040), line 22 or Schedule A (Form 1040NR), line 8). Tax rates and tables Other expenses (Schedule A (Form 1040), line 23 or Schedule A (Form 1040NR), line 9). Tax rates and tables Unreimbursed Employee Expenses Generally, the following expenses are deducted on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR), line 7. Tax rates and tables You can deduct only 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. Tax rates and tables An expense is ordinary if it is common and accepted in your trade, business, or profession. Tax rates and tables An expense is necessary if it is appropriate and helpful to your business. Tax rates and tables An expense does not have to be required to be considered necessary. Tax rates and tables You may be able to deduct the following items as unreimbursed employee expenses. Tax rates and tables Business bad debt of an employee. Tax rates and tables Business liability insurance premiums. Tax rates and tables Damages paid to a former employer for breach of an employment contract. Tax rates and tables Depreciation on a computer your employer requires you to use in your work. Tax rates and tables Dues to a chamber of commerce if membership helps you do your job. Tax rates and tables Dues to professional societies. Tax rates and tables Educator expenses. Tax rates and tables Home office or part of your home used regularly and exclusively in your work. Tax rates and tables Job search expenses in your present occupation. Tax rates and tables Laboratory breakage fees. Tax rates and tables Legal fees related to your job. Tax rates and tables Licenses and regulatory fees. Tax rates and tables Malpractice insurance premiums. Tax rates and tables Medical examinations required by an employer. Tax rates and tables Occupational taxes. Tax rates and tables Passport for a business trip. Tax rates and tables Repayment of an income aid payment received under an employer's plan. Tax rates and tables Research expenses of a college professor. Tax rates and tables Rural mail carriers' vehicle expenses. Tax rates and tables Subscriptions to professional journals and trade magazines related to your work. Tax rates and tables Tools and supplies used in your work. Tax rates and tables Travel, transportation, meals, entertainment, gifts, and local lodging related to your work. Tax rates and tables Union dues and expenses. Tax rates and tables Work clothes and uniforms if required and not suitable for everyday use. Tax rates and tables Work-related education. Tax rates and tables Business Bad Debt A business bad debt is a loss from a debt created or acquired in your trade or business. Tax rates and tables Any other worthless debt is a business bad debt only if there is a very close relationship between the debt and your trade or business when the debt becomes worthless. Tax rates and tables A debt has a very close relationship to your trade or business of being an employee if your main motive for incurring the debt is a business reason. Tax rates and tables Example. Tax rates and tables You make a bona fide loan to the corporation you work for. Tax rates and tables It fails to pay you back. Tax rates and tables You had to make the loan in order to keep your job. Tax rates and tables You have a business bad debt as an employee. Tax rates and tables More information. Tax rates and tables   For more information on business bad debts, see chapter 10 in Publication 535. Tax rates and tables For information on nonbusiness bad debts, see chapter 4 in Publication 550, Investment Income and Expenses. Tax rates and tables Business Liability Insurance You can deduct insurance premiums you paid for protection against personal liability for wrongful acts on the job. Tax rates and tables Damages for Breach of Employment Contract If you break an employment contract, you can deduct damages you pay your former employer if the damages are attributable to the pay you received from that employer. Tax rates and tables 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. Tax rates and tables For the convenience of your employer. Tax rates and tables   This means that your use of the computer is for a substantial business reason of your employer. Tax rates and tables You must consider all facts in making this determination. Tax rates and tables Use of your computer during your regular working hours to carry on your employer's business is generally for the convenience of your employer. Tax rates and tables Required as a condition of your employment. Tax rates and tables   This means that you cannot properly perform your duties without the computer. Tax rates and tables Whether you can properly perform your duties without it depends on all the facts and circumstances. Tax rates and tables It is not necessary that your employer explicitly requires you to use your computer. Tax rates and tables But neither is it enough that your employer merely states that your use of the item is a condition of your employment. Tax rates and tables Example. Tax rates and tables You are an engineer with an engineering firm. Tax rates and tables You occasionally take work home at night rather than work late at the office. Tax rates and tables You own and use a computer that is similar to the one you use at the office to complete your work at home. Tax rates and tables Since your use of the computer is not for the convenience of your employer and is not required as a condition of your employment, you cannot claim a depreciation deduction for it. Tax rates and tables Which depreciation method to use. Tax rates and tables   The depreciation method you use depends on whether you meet the more-than-50%-use test. Tax rates and tables More-than-50%-use test met. Tax rates and tables   You meet this test if you use the computer more than 50% in your work. Tax rates and tables If you meet this test, you can claim accelerated depreciation under the General Depreciation System (GDS). Tax rates and tables In addition, you may be able to take the section 179 deduction for the year you place the item in service. Tax rates and tables More-than-50%-use test not met. Tax rates and tables   If you do not meet the more-than-50%-use test, you are limited to the straight line method of depreciation under the Alternative Depreciation System (ADS). Tax rates and tables You also cannot claim the section 179 deduction. Tax rates and tables (But if you use your computer in a home office, see the exception below. Tax rates and tables ) Investment use. Tax rates and tables   Your use of a computer in connection with investments (described later under Other Expenses ) does not count as use in your work. Tax rates and tables However, you can combine your investment use with your work use in figuring your depreciation deduction. Tax rates and tables Exception for computer used in a home office. Tax rates and tables   The more-than-50%-use test does not apply to a computer used only in a part of your home that meets the requirements described later under Home Office . Tax rates and tables You can claim accelerated depreciation using GDS for a computer used in a qualifying home office, even if you do not use it more than 50% in your work. Tax rates and tables You also may be able to take a section 179 deduction for the year you place the computer in service. Tax rates and tables See Computer used in a home office under How To Report, later. Tax rates and tables More information. Tax rates and tables   For more information on depreciation and the section 179 deduction for computers and other items used in a home office, see Business Furniture and Equipment in Publication 587. Tax rates and tables Publication 946 has detailed information about the section 179 deduction and depreciation deductions using GDS and ADS. Tax rates and tables Reporting your depreciation deduction. Tax rates and tables    See How To Report, later, for information about reporting a deduction for depreciation. Tax rates and tables You must keep records to prove your percentage of business and investment use. Tax rates and tables 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. Tax rates and tables Similar organizations include: Boards of trade, Business leagues, Civic or public service organizations, Real estate boards, and Trade associations. Tax rates and tables Lobbying and political activities. Tax rates and tables    You may not be able to deduct that part of your dues that is for certain lobbying and political activities. Tax rates and tables See Lobbying Expenses under Nondeductible Expenses, later. Tax rates and tables 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. Tax rates and tables If you file Form 1040A, you can deduct these expenses on line 16. Tax rates and tables If you and your spouse are filing jointly and both of you were eligible educators, the maximum deduction is $500. Tax rates and tables However, neither spouse can deduct more than $250 of his or her qualified expenses. Tax rates and tables Eligible educator. Tax rates and tables   An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in school for at least 900 hours during a school year. Tax rates and tables Qualified expenses. Tax rates and tables   Qualified expenses include ordinary and necessary expenses paid in connection with books, supplies, equipment (including computer equipment, software, and services), and other materials used in the classroom. Tax rates and tables An ordinary expense is one that is common and accepted in your educational field. Tax rates and tables A necessary expense is one that is helpful and appropriate for your profession as an educator. Tax rates and tables An expense does not have to be required to be considered necessary. Tax rates and tables   Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. Tax rates and tables You must reduce your qualified expenses by the following amounts. Tax rates and tables Excludable U. Tax rates and tables S. Tax rates and tables series EE and I savings bond interest from Form 8815. Tax rates and tables Nontaxable qualified state tuition program earnings. Tax rates and tables Nontaxable earnings from Coverdell education savings accounts. Tax rates and tables Any reimbursements you received for those expenses that were not reported to you on your Form W-2, box 1. Tax rates and tables Educator expenses over limit. Tax rates and tables   If you were an educator in 2013 and you had qualified expenses that you cannot take as an adjustment to gross income, you can deduct the rest as an itemized deduction subject to the 2% limit. Tax rates and tables 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. Tax rates and tables 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. Tax rates and tables The regular and exclusive business use must be for the convenience of your employer and not just appropriate and helpful in your job. Tax rates and tables Principal place of business. Tax rates and tables   If you have more than one place of business, the business part of your home is your principal place of business if: You use it regularly and exclusively for administrative or management activities of your trade or business, and You have no other fixed location where you conduct substantial administrative or management activities of your trade or business. Tax rates and tables   Otherwise, the location of your principal place of business generally depends on the relative importance of the activities performed at each location and the time spent at each location. Tax rates and tables You should keep records that will give the information needed to figure the deduction according to these rules. Tax rates and tables Also keep canceled checks, substitute checks, or account statements and receipts of the expenses paid to prove the deductions you claim. Tax rates and tables More information. Tax rates and tables   See Publication 587 for more detailed information and a worksheet for figuring the deduction. Tax rates and tables 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. Tax rates and tables 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. Tax rates and tables Employment and outplacement agency fees. Tax rates and tables    You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation. Tax rates and tables Employer pays you back. Tax rates and tables   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. Tax rates and tables See Recoveries in Publication 525. Tax rates and tables Employer pays the employment agency. Tax rates and tables   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. Tax rates and tables Résumé. Tax rates and tables   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. Tax rates and tables Travel and transportation expenses. Tax rates and tables   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. Tax rates and tables You can deduct the travel expenses if the trip is primarily to look for a new job. Tax rates and tables 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. Tax rates and tables   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. Tax rates and tables    You can choose to use the standard mileage rate to figure your car expenses. Tax rates and tables The 2013 rate for business use of a vehicle is 56½ cents per mile. Tax rates and tables See Publication 463 for more information on travel and car expenses. Tax rates and tables Legal Fees You can deduct legal fees related to doing or keeping your job. Tax rates and tables 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. Tax rates and tables 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. Tax rates and tables 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. Tax rates and tables 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. Tax rates and tables 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. Tax rates and tables Research Expenses of a College Professor If you are a college professor, you can deduct your research expenses, including travel expenses, for teaching, lecturing, or writing and publishing on subjects that relate directly to your teaching duties. Tax rates and tables 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. Tax rates and tables However, you cannot deduct the cost of travel as a form of education. Tax rates and tables Rural Mail Carriers' Vehicle Expenses If your expenses to use a vehicle in performing services as a rural mail carrier are more than the amount of your reimbursements, you can deduct the unreimbursed expenses. Tax rates and tables See chapter 4 of Publication 463 for more information. Tax rates and tables 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. Tax rates and tables You can depreciate the cost of tools that have a useful life substantially beyond the tax year. Tax rates and tables For more information about depreciation, see Publication 946. Tax rates and tables Travel, Transportation, Meals, Entertainment, Gifts, and Local Lodging If you are an employee and have ordinary and necessary business-related expenses for travel away from home, local transportation, entertainment, and gifts, you may be able to deduct these expenses. Tax rates and tables Generally, you must file Form 2106 or Form 2106-EZ to claim these expenses. Tax rates and tables Travel expenses. Tax rates and tables   Travel expenses are those incurred while traveling away from home for your employer. Tax rates and tables You can deduct travel expenses paid or incurred in connection with a temporary work assignment. Tax rates and tables Generally, you cannot deduct travel expenses paid or incurred in connection with an indefinite work assignment. Tax rates and tables   Travel expenses may include: The cost of getting to and from your business destination (air, rail, bus, car, etc. Tax rates and tables ), Meals and lodging while away from home, Taxi fares, Baggage charges, and Cleaning and laundry expenses. Tax rates and tables   Travel expenses are discussed more fully in chapter 1 of Publication 463. Tax rates and tables Temporary work assignment. Tax rates and tables    If your assignment or job away from home in a single location is realistically expected to last (and does in fact last) for 1 year or less, it is temporary, unless there are facts and circumstances that indicate it is not. Tax rates and tables Indefinite work assignment. Tax rates and tables   If your assignment or job away from home in a single location is realistically expected to last for more than 1 year, it is indefinite, whether or not it actually lasts for more than 1 year. Tax rates and tables If your assignment or job away from home in a single location is realistically expected to last for 1 year or less, but at some later date it is realistically expected to exceed 1 year, it will be treated as temporary (in the absence of facts and circumstances indicating otherwise) until the date that your realistic expectation changes, and it will be treated as indefinite after that date. Tax rates and tables Federal crime investigation and prosecution. Tax rates and tables   If you are a federal employee participating in a federal crime investigation or prosecution, you are not subject to the 1-year rule for deducting temporary travel expenses. Tax rates and tables This means that you may be able to deduct travel expenses even if you are away from your tax home for more than 1 year. Tax rates and tables   To qualify, the Attorney General must certify that you are traveling: For the Federal Government, In a temporary duty status, and To investigate, prosecute, or provide support services for the investigation or prosecution of a federal crime. Tax rates and tables Armed Forces reservists traveling more than 100 miles from home. Tax rates and tables   If you are a member of a reserve component of the Armed Forces of the United States and you travel more than 100 miles away from home in connection with your performance of services as a member of the reserves, you can deduct some of your travel expenses as an adjustment to gross income rather than as a miscellaneous itemized deduction. Tax rates and tables The amount of expenses you can deduct as an adjustment to gross income is limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees, and tolls. Tax rates and tables The balance, if any, is reported on Schedule A. Tax rates and tables   You are a member of a reserve component of the Armed Forces of the United States if you are in the Army, Naval, Marine Corps, Air Force, Coast Guard Reserve, the Army National Guard of the United States, the Air National Guard of the United States, or the Reserve Corps of the Public Health Service. Tax rates and tables   For more information on travel expenses, see Publication 463. Tax rates and tables Local transportation expenses. Tax rates and tables   Local transportation expenses are the expenses of getting from one workplace to another when you are not traveling away from home. Tax rates and tables They include the cost of transportation by air, rail, bus, taxi, and the cost of using your car. Tax rates and tables   You can choose to use the standard mileage rate to figure your car expenses. Tax rates and tables The 2013 rate for business use of a vehicle is 56½ cents per mile. Tax rates and tables    In general, the costs of commuting between your residence and your place of business are nondeductible. Tax rates and tables Work at two places in a day. Tax rates and tables   If you work at two places in a day, whether or not for the same employer, you can generally deduct the expenses of getting from one workplace to the other. Tax rates and tables Temporary work location. Tax rates and tables   You can deduct expenses incurred in going between your home and a temporary work location if at least one of the following applies. Tax rates and tables The work location is outside the metropolitan area where you live and normally work. Tax rates and tables You have at least one regular work location (other than your home) for the same trade or business. Tax rates and tables (If this applies, the distance between your home and the temporary work location does not matter. Tax rates and tables )   For this purpose, a work location is generally considered temporary if your work there is realistically expected to last (and does in fact last) for 1 year or less. Tax rates and tables It is not temporary if your work there is realistically expected to last for more than 1 year, even if it actually lasts for 1 year or less. Tax rates and tables If your work there initially is realistically expected to last for 1 year or less, but later is realistically expected to last for more than 1 year, the work location is generally considered temporary until the date your realistic expectation changes and not temporary after that date. Tax rates and tables For more information, see chapter 1 of Publication 463. Tax rates and tables Home office. Tax rates and tables   You can deduct expenses incurred in going between your home and a workplace if your home is your principal place of business for the same trade or business. Tax rates and tables (In this situation, whether the other workplace is temporary or regular and its distance from your home do not matter. Tax rates and tables ) See Home Office , earlier, for a discussion on the use of your home as your principal place of business. Tax rates and tables Meals and entertainment. Tax rates and tables   Generally, you can deduct entertainment expenses (including entertainment-related meals) only if they are directly related to the active conduct of your trade or business. Tax rates and tables However, the expense only needs to be associated with the active conduct of your trade or business if it directly precedes or follows a substantial and bona fide business-related discussion. Tax rates and tables   You can deduct only 50% of your business-related meal and entertainment expenses unless the expenses meet certain exceptions. Tax rates and tables You apply this 50% limit before you apply the 2%-of-adjusted-gross-income limit. Tax rates and tables Meals when subject to “hours of service” limits. Tax rates and tables   You can deduct 80% of your business-related meal expenses if you consume the meals during or incident to any period subject to the Department of Transportation's “hours of service” limits. Tax rates and tables You apply this 80% limit before you apply the 2%-of-adjusted-gross-income limit. Tax rates and tables Gift expenses. Tax rates and tables   You can generally deduct up to $25 of business gifts you give to any one individual during the year. Tax rates and tables The following items do not count toward the $25 limit. Tax rates and tables Identical, widely distributed items costing $4 or less that have your name clearly and permanently imprinted. Tax rates and tables Signs, racks, and promotional materials to be displayed on the business premises of the recipient. Tax rates and tables Local lodging. Tax rates and tables   If your employer provides or requires you to obtain lodging while you are not traveling away from home, you can deduct the cost of the lodging if it is: on a temporary basis, necessary for you to participate in or be available for a business meeting or employer function, and the costs are ordinary and necessary, but not lavish or extravagant. Tax rates and tables   If your employer provides the lodging or reimburses you for the cost of the lodging, you can deduct the cost only if the value or the reimbursement is included in your gross income because it is reported as wages on your Form W-2. Tax rates and tables Additional information. Tax rates and tables    See Publication 463 for more information on travel, transportation, meal, entertainment, and gift expenses, and reimbursements for these expenses. Tax rates and tables Union Dues and Expenses You can deduct dues and initiation fees you pay for union membership. Tax rates and tables You can also deduct assessments for benefit payments to unemployed union members. Tax rates and tables However, you cannot deduct the part of the assessments or contributions that provides funds for the payment of sick, accident, or death benefits. Tax rates and tables Also, you cannot deduct contributions to a pension fund even if the union requires you to make the contributions. Tax rates and tables You may not be able to deduct amounts you pay to the union that are related to certain lobbying and political activities. Tax rates and tables See Lobbying Expenses under Nondeductible Expenses, later. Tax rates and tables Work Clothes and Uniforms You can deduct the cost and upkeep of work clothes if the following two requirements are met. Tax rates and tables You must wear them as a condition of your employment. Tax rates and tables The clothes are not suitable for everyday wear. Tax rates and tables It is not enough that you wear distinctive clothing. Tax rates and tables The clothing must be specifically required by your employer. Tax rates and tables Nor is it enough that you do not, in fact, wear your work clothes away from work. Tax rates and tables The clothing must not be suitable for taking the place of your regular clothing. Tax rates and tables 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. Tax rates and tables ). Tax rates and tables Musicians and entertainers can deduct the cost of theatrical clothing and accessories that are not suitable for everyday wear. Tax rates and tables 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. Tax rates and tables Similarly, the costs of buying and maintaining blue work clothes worn by a welder at the request of a foreman are not deductible. Tax rates and tables Protective clothing. Tax rates and tables   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. Tax rates and tables   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. Tax rates and tables Military uniforms. Tax rates and tables   You generally cannot deduct the cost of your uniforms if you are on full-time active duty in the armed forces. Tax rates and tables 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. Tax rates and tables In figuring the deduction, you must reduce the cost by any nontaxable allowance you receive for these expenses. Tax rates and tables   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. Tax rates and tables   If you are a student at an armed forces academy, you cannot deduct the cost of your uniforms if they replace regular clothing. Tax rates and tables However, you can deduct the cost of insignia, shoulder boards, and related items. Tax rates and tables    You can deduct the cost of your uniforms if you are a civilian faculty or staff member of a military school. Tax rates and tables Work-Related Education You can deduct expenses you have for education, even if the education may lead to a degree, if the education meets at least one of the following two tests. Tax rates and tables It maintains or improves skills required in your present work. Tax rates and tables It is required by your employer or the law to keep your salary, status, or job, and the requirement serves a business purpose of your employer. Tax rates and tables You cannot deduct expenses you have for education, even though one or both of the preceding tests are met, if the education: Is needed to meet the minimum educational requirements to qualify you in your trade or business, or Is part of a program of study that will lead to qualifying you in a new trade or business. Tax rates and tables If your education qualifies, you can deduct expenses for tuition, books, supplies, laboratory fees, and similar items, and certain transportation costs. Tax rates and tables If the education qualifies you for a new trade or business, you cannot deduct the educational expenses even if you do not intend to enter that trade or business. Tax rates and tables Travel as education. Tax rates and tables   You cannot deduct the cost of travel that in itself constitutes a form of education. Tax rates and tables For example, a French teacher who travels to France to maintain general familiarity with the French language and culture cannot deduct the cost of the trip as an educational expense. Tax rates and tables More information. Tax rates and tables    See Publication 970, Tax Benefits for Education, for a complete discussion of the deduction for work-related education expenses. Tax rates and tables Education Expenses During Unemployment If you stop working for a year or less in order to get education in order to maintain or improve skills needed in your present work and then return to the same general type of work, your absence is considered temporary. Tax rates and tables Education that you get during a temporary absence is qualifying work-related education if it maintains or improves skills needed in your present work. Tax rates and tables Tax Preparation Fees You can usually deduct tax preparation fees on the return for the year in which you pay them. Tax rates and tables Thus, on your 2013 return, you can deduct fees paid in 2013 for preparing your 2012 return. Tax rates and tables These fees include the cost of tax preparation software programs and tax publications. Tax rates and tables They also include any fee you paid for electronic filing of your return. Tax rates and tables See Tax preparation fees under How To Report, later. Tax rates and tables Other Expenses You can deduct certain other expenses as miscellaneous itemized deductions subject to the 2%-of-adjusted-gross-income limit. Tax rates and tables On Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9, you can deduct the ordinary and necessary 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. Tax rates and tables You can deduct expenses you pay for the purposes in (1) and (2) above only if they are reasonable and closely related to these purposes. Tax rates and tables These other expenses include the following items. Tax rates and tables Appraisal fees for a casualty loss or charitable contribution. Tax rates and tables Casualty and theft losses from property used in performing services as an employee. Tax rates and tables Clerical help and office rent in caring for investments. Tax rates and tables Depreciation on home computers used for investments. Tax rates and tables Excess deductions (including administrative expenses) allowed a beneficiary on termination of an estate or trust. Tax rates and tables Fees to collect interest and dividends. Tax rates and tables Hobby expenses, but generally not more than hobby income. Tax rates and tables Indirect miscellaneous deductions from pass-through entities. Tax rates and tables Investment fees and expenses. Tax rates and tables Legal fees related to producing or collecting taxable income or getting tax advice. Tax rates and tables Loss on deposits in an insolvent or bankrupt financial institution. Tax rates and tables Loss on traditional IRAs or Roth IRAs, when all amounts have been distributed to you. Tax rates and tables Repayments of income. Tax rates and tables Repayments of social security benefits. Tax rates and tables Safe deposit box rental, except for storing jewelry and other personal effects. Tax rates and tables Service charges on dividend reinvestment plans. Tax rates and tables Tax advice fees. Tax rates and tables Trustee's fees for your IRA, if separately billed and paid. Tax rates and tables If the expenses you pay produce income that is only partially taxable, see Tax-Exempt Income Expenses, later, under Nondeductible Expenses. Tax rates and tables Appraisal Fees You can deduct appraisal fees if you pay them to figure a casualty loss or the fair market value of donated property. Tax rates and tables 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. Tax rates and tables First report the loss in Section B of Form 4684, Casualties and Thefts. Tax rates and tables You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. Tax rates and tables 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. Tax rates and tables For more information on casualty and theft losses, see Publication 547, Casualties, Disasters, and Thefts. Tax rates and tables 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. Tax rates and tables 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. Tax rates and tables The fees are deductible on the return for the year in which you paid them. Tax rates and tables For example, fees charged to payments made in 2013 can be claimed on the 2013 tax return. Tax rates and tables 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). Tax rates and tables You generally must depreciate the computer using the straight line method over the Alternative Depreciation System (ADS) recovery period. Tax rates and tables But if you work as an employee and also use the computer in that work, see Depreciation on Computers under Unreimbursed Employee Expenses, earlier. Tax rates and tables For more information on depreciation, see Publication 946. Tax rates and tables 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. Tax rates and tables Do not include deductions for the estate's personal exemption and charitable contributions when figuring the estate's total deductions. Tax rates and tables 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. Tax rates and tables For more information, see Termination of Estate in Publication 559, Survivors, Executors, and Administrators. Tax rates and tables 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. Tax rates and tables But you cannot deduct a fee you pay to a broker to buy investment property, such as stocks or bonds. Tax rates and tables You must add the fee to the cost of the property. Tax rates and tables You cannot deduct the fee you pay to a broker to sell securities. Tax rates and tables You can use the fee only to figure gain or loss from the sale. Tax rates and tables See the instructions for Schedule D (Form 1040) for information on how to report the fee. Tax rates and tables Hobby Expenses You can generally deduct hobby expenses, but only up to the amount of hobby income. Tax rates and tables A hobby is not a business because it is not carried on to make a profit. Tax rates and tables See Not-for-Profit Activities in chapter 1 of Publication 535. Tax rates and tables Indirect Deductions of Pass-Through Entities Pass-through entities include partnerships, S corporations, and mutual funds that are not publicly offered. Tax rates and tables Deductions of pass-through entities are passed through to the partners or shareholders. Tax rates and tables The partners or shareholders can deduct their share of passed-through deductions for investment expenses as miscellaneous itemized deductions subject to the 2% limit. Tax rates and tables Example. Tax rates and tables You are a member of an investment club that is formed solely to invest in securities. Tax rates and tables The club is treated as a partnership. Tax rates and tables The partnership's income is solely from taxable dividends, interest, and gains from sales of securities. Tax rates and tables In this case, you can deduct your share of the partnership's operating expenses as miscellaneous itemized deductions subject to the 2% limit. Tax rates and tables 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. Tax rates and tables Publicly offered mutual funds. Tax rates and tables   Publicly offered mutual funds do not pass deductions for investment expenses through to shareholders. Tax rates and tables 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. Tax rates and tables   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). Tax rates and tables This net figure is the amount you report on your return as income. Tax rates and tables You cannot further deduct investment expenses related to publicly offered mutual funds because they are already included as part of the net income amount. Tax rates and tables Information returns. Tax rates and tables   You should receive information returns from pass-through entities. Tax rates and tables Partnerships and S corporations. Tax rates and tables   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. Tax rates and tables Nonpublicly offered mutual funds. Tax rates and tables   These funds will send you a Form 1099-DIV, or a substitute form, showing your share of gross income and investment expenses. Tax rates and tables You can claim the expenses only as a miscellaneous itemized deduction subject to the 2% limit. Tax rates and tables 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. Tax rates and tables 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. Tax rates and tables 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. Tax rates and tables 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. Tax rates and tables You deduct expenses of resolving nonbusiness tax issues on Schedule A (Form 1040 or Form 1040NR). Tax rates and tables See Tax Preparation Fees, earlier. Tax rates and tables Unlawful discrimination claims. Tax rates and tables   You may be able to deduct, as an adjustment to income on Form 1040, line 36, or Form 1040NR, line 35, rather than as a miscellaneous itemized deduction, attorney fees and court costs for actions settled or decided after October 22, 2004, involving a claim of unlawful discrimination, a claim against the U. Tax rates and tables S. Tax rates and tables Government, or a claim made under section 1862(b)(3)(A) of the Social Security Act. Tax rates and tables However, the amount you can deduct on Form 1040, line 36, or Form 1040NR, line 35, is limited to the amount of the judgment or settlement you are including in income for the tax year. Tax rates and tables See Publication 525 for more information. Tax rates and tables Loss on Deposits A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. Tax rates and tables If you can reasonably estimate the amount of your loss on money you have on deposit in a financial institution that becomes insolvent or bankrupt, you can generally choose to deduct it in the current year even though its exact amount has not been finally determined. Tax rates and tables If elected, the casualty loss is subject to certain deduction limitations. Tax rates and tables The election is made on Form 4684. Tax rates and tables Once you make this choice, you cannot change it without IRS approval. Tax rates and tables If none of the deposit is federally insured, you can deduct the loss in either of the following ways. Tax rates and tables As an ordinary loss (as a miscellaneous itemized deduction subject to the 2% limit). Tax rates and tables Write the name of the financial institution and “Insolvent Financial Institution” beside the amount on Schedule A (Form 1040), line 23, or Schedule A (Form 1040NR), line 9. Tax rates and tables This deduction is limited to $20,000 ($10,000 if you are married filing separately) for each financial institution, reduced by any expected state insurance proceeds. Tax rates and tables As a casualty loss. Tax rates and tables Report it on Form 4684 first and then on Schedule A (Form 1040). Tax rates and tables See Publication 547 for details. Tax rates and tables As a nonbusiness bad debt. Tax rates and tables Report it on Schedule D (Form 1040). Tax rates and tables If any part of the deposit is federally insured, you can deduct the loss only as a casualty loss. Tax rates and tables Exception. Tax rates and tables   You cannot make this choice if you are a 1%-or-more-owner or an officer of the financial institution, or are related to such owner or officer. Tax rates and tables For a definition of “related,” see Deposit in Insolvent or Bankrupt Financial Institution in chapter 4 of Publication 550. Tax rates and tables Actual loss different from estimated loss. Tax rates and tables   If you make this choice and your actual loss is less than your estimated loss, you must include the excess in income. Tax rates and tables See Recoveries in Publication 525. Tax rates and tables If your actual loss is more than your estimated loss, treat the excess loss as explained under Choice not made, next. Tax rates and tables Choice not made. Tax rates and tables   If you do not make this choice (or if you have an excess actual loss after choosing to deduct your estimated loss), treat your loss (or excess loss) as a nonbusiness bad debt (deductible as a short-term capital loss) in the year its amount is finally determined. Tax rates and tables See Nonbusiness Bad Debts in chapter 4 of Publication 550. Tax rates and tables Loss on IRA If you have a loss on your traditional IRA (or Roth IRA) investment, you can deduct the loss as a miscellaneous itemized deduction subject to the 2% limit, but only when all the amounts in all your traditional IRA (or Roth IRA) accounts have been distributed to you and the total distributions are less than your unrecovered basis. Tax rates and tables For more information, see Publication 590, Individual Retirement Arrangements (IRAs). Tax rates and tables 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. Tax rates and tables If the amount you had to repay was ordinary income of $3,000 or less, the deduction is subject to the 2% limit. Tax rates and tables If it was more than $3,000, see Repayments Under Claim of Right under Deductions Not Subject to the 2% Limit, later. Tax rates and tables Repayments of Social Security Benefits If the total of the amounts in box 5 (net benefits for 2013) of all your Forms SSA-1099, Social Security Benefit Statement, and Forms RRB-1099, Payments By the Railroad Retirement Board, is a negative figure (a figure in parentheses), you may be able to take a miscellaneous itemized deduction subject to the 2% limit. Tax rates and tables The amount you can deduct is the part of the negative figure that represents an amount you included in gross income in an earlier year. Tax rates and tables The amount in box 5 of Form SSA-1099 or RRB-1099 is the net amount of your benefits for the year. Tax rates and tables It will be a negative figure if the amount of benefits you repaid in 2013 (box 4) is more than the gross amount of benefits paid to you in 2013 (box 3). Tax rates and tables If the deduction is more than $3,000, you will have to use a special computation to figure your tax. Tax rates and tables See Publication 915, Social Security and Equivalent Railroad Retirement Benefits, for additional information. Tax rates and tables 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. Tax rates and tables You cannot deduct the rent if you use the box only for jewelry, other personal items, or tax-exempt securities. Tax rates and tables Service Charges on Dividend Reinvestment Plans You can deduct service charges you pay as a subscriber in a dividend reinvestment plan. Tax rates and tables 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. Tax rates and tables Trustee's Administrative Fees for IRA Trustee's administrative fees that are billed separately and paid by you in connection with your IRA are deductible (if they are ordinary and necessary) as a miscellaneous itemized deduction subject to the 2% limit. Tax rates and tables Deductions Not Subject to the 2% Limit You can deduct the items listed below as miscellaneous itemized deductions. Tax rates and tables They are not subject to the 2% limit. Tax rates and tables Report these items on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 14. Tax rates and tables List of Deductions Amortizable premium on taxable bonds. Tax rates and tables Casualty and theft losses from income-producing property. Tax rates and tables Federal estate tax on income in respect of a decedent. Tax rates and tables Gambling losses up to the amount of gambling winnings. Tax rates and tables Impairment-related work expenses of persons with disabilities. Tax rates and tables Loss from other activities from Schedule K-1 (Form 1065-B), box 2. Tax rates and tables Losses from Ponzi-type investment schemes. Tax rates and tables Repayments of more than $3,000 under a claim of right. Tax rates and tables Unrecovered investment in an annuity. Tax rates and tables 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. Tax rates and tables You can elect to amortize the premium on taxable bonds. Tax rates and tables The amortization of the premium is generally an offset to interest income on the bond rather than a separate deduction item. Tax rates and tables Pre-1998 election to amortize bond premium. Tax rates and tables   Generally, if you first elected to amortize bond premium before 1998, the above treatment of the premium does not apply to bonds you acquired before 1988. Tax rates and tables Bonds acquired after October 22, 1986, and before 1988. Tax rates and tables   The amortization of the premium on these bonds is investment interest expense subject to the investment interest limit, unless you chose to treat it as an offset to interest income on the bond. Tax rates and tables Bonds acquired before October 23, 1986. Tax rates and tables   The amortization of the premium on these bonds is a miscellaneous itemized deduction not subject to the 2% limit. Tax rates and tables Deduction for excess premium. Tax rates and tables   On certain bonds (such as bonds that pay a variable rate of interest or that provide for an interest-free period), the amount of bond premium allocable to a period may exceed the amount of stated interest allocable to the period. Tax rates and tables If this occurs, treat the excess as a miscellaneous itemized deduction that is not subject to the 2% limit. Tax rates and tables However, the amount deductible is limited to the amount by which your total interest inclusions on the bond in prior periods exceed the total amount you treated as a bond premium deduction on the bond in prior periods. Tax rates and tables If any of the excess bond premium cannot be deducted because of the limit, this amount is carried forward to the next period and is treated as bond premium allocable to that period. Tax rates and tables    Pre-1998 choice to amortize bond premium. Tax rates and tables If you made the choice to amortize the premium on taxable bonds before 1998, you can deduct the bond premium amortization that is more than your interest income only for bonds acquired during 1998 and later years. Tax rates and tables More information. Tax rates and tables    For more information on bond premium, see Bond Premium Amortization in chapter 3 of Publication 550. Tax rates and tables 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). Tax rates and tables First report the loss in Section B of Form 4684. Tax rates and tables You may also have to include the loss on Form 4797, Sales of Business Property, if you are otherwise required to file that form. Tax rates and tables 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. Tax rates and tables For more information on casualty and theft losses, see Publication 547. Tax rates and tables 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. Tax rates and tables 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. Tax rates and tables See Publication 559 for information about figuring the amount of this deduction. Tax rates and tables 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. Tax rates and tables You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. Tax rates and tables You cannot deduct gambling losses that are more than your winnings. Tax rates and tables Generally, nonresident aliens cannot deduct gambling losses on Schedule A (Form 1040NR). Tax rates and tables You cannot reduce your gambling winnings by your gambling losses and report the difference. Tax rates and tables 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. Tax rates and tables Therefore, your records should show your winnings separately from your losses. Tax rates and tables Diary of winnings and losses. Tax rates and tables You must keep an accurate diary or similar record of your losses and winnings. Tax rates and tables Your diary should contain at least the following information. Tax rates and tables The date and type of your specific wager or wagering activity. Tax rates and tables The name and address or location of the gambling establishment. Tax rates and tables The names of other persons present with you at the gambling establishment. Tax rates and tables The amount(s) you won or lost. Tax rates and tables Proof of winnings and losses. Tax rates and tables   In addition to your diary, you should also have other documentation. Tax rates and tables You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment. Tax rates and tables   For specific wagering transactions, you can use the following items to support your winnings and losses. Tax rates and tables    These recordkeeping suggestions are intended as general guidelines to help you establish your winnings and losses. Tax rates and tables They are not all-inclusive. Tax rates and tables Your tax liability depends on your particular facts and circumstances. Tax rates and tables Keno. Tax rates and tables   Copies of the keno tickets you purchased that were validated by the gambling establishment, copies of your casino credit records, and copies of your casino check cashing records. Tax rates and tables Slot machines. Tax rates and tables   A record of the machine number and all winnings by date and time the machine was played. Tax rates and tables Table games (twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc. Tax rates and tables ). Tax rates and tables   The number of the table at which you were playing. Tax rates and tables Casino credit card data indicating whether the credit was issued in the pit or at the cashier's cage. Tax rates and tables Bingo. Tax rates and tables   A record of the number of games played, cost of tickets purchased, and amounts collected on winning tickets. Tax rates and tables Supplemental records include any receipts from the casino, parlor, etc. Tax rates and tables Racing (horse, harness, dog, etc. Tax rates and tables ). Tax rates and tables   A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets. Tax rates and tables Supplemental records include unredeemed tickets and payment records from the racetrack. Tax rates and tables Lotteries. Tax rates and tables   A record of ticket purchases, dates, winnings, and losses. Tax rates and tables Supplemental records include unredeemed tickets, payment slips, and winnings statements. Tax rates and tables 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. Tax rates and tables Impairment-related work expenses are ordinary and necessary business expenses for attendant care services at your place of work and other expenses in connection with your place of work that are necessary for you to be able to work. Tax rates and tables Example. Tax rates and tables You are blind. Tax rates and tables You must use a reader to do your work. Tax rates and tables You use the reader both during your regular working hours at your place of work and outside your regular working hours away from your place of work. Tax rates and tables The reader's services are only for your work. Tax rates and tables You can deduct your expenses for the reader as impairment-related work expenses. Tax rates and tables Self-employed. Tax rates and tables   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. Tax rates and tables See Impairment-related work expenses. Tax rates and tables , later under How To Report. Tax rates and tables 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, or Schedule A (Form 1040NR), line 14 (only if effectively connected with a U. Tax rates and tables S. Tax rates and tables trade or business). Tax rates and tables It is not subject to the passive activity limitations. Tax rates and tables Officials Paid on a Fee Basis If you are a fee-basis official, you can claim your expenses in performing services in that job as an adjustment to income rather than as a miscellaneous itemized deduction. Tax rates and tables See Publication 463 for more information. Tax rates and tables Performing Artists If you are a qualified performing artist, you can deduct your employee business expenses as an adjustment to income rather than as a miscellaneous itemized deduction. Tax rates and tables If you are an employee, complete Form 2106 or Form 2106-EZ. Tax rates and tables See Publication 463 for more information. Tax rates and tables Losses From Ponzi-type Investment Schemes These losses are deductible as theft losses of income-producing property on your tax return for the year the loss was discovered. Tax rates and tables You figure the deductible loss in Section B of Form 4684. Tax rates and tables However, if you qualify to use Revenue Procedure 2009-20 (as modified by Revenue Procedure 2011-58) and you choose to follow the procedures in the guidance, complete Section C of Form 4684 before completing Section B. Tax rates and tables Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. Tax rates and tables You do not need to complete Appendix A. Tax rates and tables See the Form 4684 instructions and Publication 547, Casualties, Disasters, and Thefts, for more information. Tax rates and tables 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. Tax rates and tables See Repayments in Publication 525 for more information. Tax rates and tables 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. Tax rates and tables 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. Tax rates and tables See Publication 575, Pension and Annuity Income, for more information about the tax treatment of pensions and annuities. Tax rates and tables Nondeductible Expenses You cannot deduct the following expenses. Tax rates and tables List of Nondeductible Expenses Adoption expenses. Tax rates and tables Broker's commissions. Tax rates and tables Burial or funeral expenses, including the cost of a cemetery lot. Tax rates and tables Campaign expenses. Tax rates and tables Capital expenses. Tax rates and tables Check-writing fees. Tax rates and tables Club dues. Tax rates and tables Commuting expenses. Tax rates and tables Fees and licenses, such as car licenses, marriage licenses, and dog tags. Tax rates and tables Fines and penalties, such as parking tickets. Tax rates and tables Health spa expenses. Tax rates and tables Hobby losses—but see Hobby Expenses, earlier. Tax rates and tables Home repairs, insurance, and rent. Tax rates and tables Home security system. Tax rates and tables Illegal bribes and kickbacks—see Bribes and kickbacks in chapter 11 of Publication 535. Tax rates and tables Investment-related seminars. Tax rates and tables Life insurance premiums paid by the insured. Tax rates and tables Lobbying expenses. Tax rates and tables Losses from the sale of your home, furniture, personal car, etc. Tax rates and tables Lost or misplaced cash or property. Tax rates and tables Lunches with co-workers. Tax rates and tables Meals while working late. Tax rates and tables Medical expenses as business expenses other than medical examinations required by your employer. Tax rates and tables Personal disability insurance premiums. Tax rates and tables Personal legal expenses. Tax rates and tables Personal, living, or family expenses. Tax rates and tables Political contributions. Tax rates and tables Professional accreditation fees. Tax rates and tables Professional reputation, expenses to improve. Tax rates and tables Relief fund contributions. Tax rates and tables Residential telephone line. Tax rates and tables Stockholders' meeting, expenses of attending. Tax rates and tables Tax-exempt income, expenses of earning or collecting. Tax rates and tables The value of wages never received or lost vacation time. Tax rates and tables Travel expenses for another individual. Tax rates and tables Voluntary unemployment benefit fund contributions. Tax rates and tables Wristwatches. Tax rates and tables Adoption Expenses You cannot deduct the expenses of adopting a child but you may be able to take a credit for those expenses. Tax rates and tables For details, see Form 8839, Qualified Adoption Expenses. Tax rates and tables Commissions Commissions paid on the purchase of securities are not deductible, either as business or nonbusiness expenses. Tax rates and tables Instead, these fees must be added to the taxpayer's cost of the securities. Tax rates and tables Commissions paid on the sale are deductible as business expenses only by dealers. Tax rates and tables Campaign Expenses You cannot deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to the office. Tax rates and tables These include qualification and registration fees for primary elections. Tax rates and tables Legal fees. Tax rates and tables   You cannot deduct legal fees paid to defend charges that arise from participation in a political campaign. Tax rates and tables Capital Expenses You cannot currently deduct amounts paid to buy property that has a useful life substantially beyond the tax year or amounts paid to increase the value or prolong the life of property. Tax rates and tables If you use such property in your work, you may be able to take a depreciation deduction. Tax rates and tables See Publication 946. Tax rates and tables If the property is a car used in your work, also see Publication 463. Tax rates and tables 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. Tax rates and tables Club Dues Generally, you cannot deduct the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. Tax rates and tables This includes business, social, athletic, luncheon, sporting, airline, hotel, golf, and country clubs. Tax rates and tables 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. Tax rates and tables Dues paid to airline, hotel, and luncheon clubs are not deductible. Tax rates and tables Commuting Expenses You cannot deduct commuting expenses (the cost of transportation between your home and your main or regular place of work). Tax rates and tables 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. Tax rates and tables Fines or Penalties You cannot deduct fines or penalties you pay to a governmental unit for violating a law. Tax rates and tables This includes an amount paid in settlement of your actual or potential liability for a fine or penalty (civil or criminal). Tax rates and tables Fines or penalties include parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike. Tax rates and tables 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. Tax rates and tables Home Security System You cannot deduct the cost of a home security system as a miscellaneous deduction. Tax rates and tables However, you may be able to claim a deduction for a home security system as a business expense if you have a home office. Tax rates and tables See Home Office under Unreimbursed Employee Expenses, earlier, and Publication 587. Tax rates and tables Investment-Related Seminars You cannot deduct any expenses for attending a convention, seminar, or similar meeting for investment purposes. Tax rates and tables Life Insurance Premiums You cannot deduct premiums you pay on your life insurance. Tax rates and tables You may be able to deduct, as alimony, premiums you pay on life insurance policies assigned to your former spouse. Tax rates and tables See Publication 504, Divorced or Separated Individuals, for information on alimony. Tax rates and tables Lobbying Expenses You generally cannot deduct amounts paid or incurred for lobbying expenses. Tax rates and tables 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. Tax rates and tables Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordination of any of these activities. Tax rates and tables Covered executive branch official. Tax rates and tables   A covered executive branch official, for the purpose of (4) above, is any of the following officials. Tax rates and tables The President. Tax rates and tables The Vice President. Tax rates and tables Any officer or employee of the White House Office of the Executive Office of the President, and the two most senior level officers of each of the other agencies in the Executive Office. Tax rates and tables Any individual serving in a position in Level I of the Executive Schedule under section 5312 of Title 5, United States Code, any other individual designated by the President as having Cabinet-level status, and any immediate deputy of one of these individuals. Tax rates and tables Dues used for lobbying. Tax rates and tables   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. Tax rates and tables Exceptions. Tax rates and tables   You can deduct certain lobbying expenses if they are ordinary and necessary expenses of carrying on your trade or business. Tax rates and tables You can deduct expenses for attempting to influence the legislation of any local council or similar governing body (local legislation). Tax rates and tables An Indian tribal government is considered a local council or similar governing body. Tax rates and tables You can deduct in-house expenses for influencing legislation or communicating directly with a covered executive branch official if the expenses for the tax year are not more than $2,000 (not counting overhead expenses). Tax rates and tables If you are a professional lobbyist, you can deduct the expenses you incur in the trade or business of lobbying on behalf of another person. Tax rates and tables Payments by the other person to you for lobbying activities cannot be deducted. Tax rates and tables Lost or Mislaid Cash or Property You cannot deduct a loss based on the mere disappearance of money or property. Tax rates and tables 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. Tax rates and tables See Publication 547. Tax rates and tables Example. Tax rates and tables A car door is accidentally slammed on your hand, breaking the setting of your diamond ring. Tax rates and tables The diamond falls from the ring and is never found. Tax rates and tables The loss of the diamond is a casualty. Tax rates and tables Lunches With Co-workers You cannot deduct the expenses of lunches with co-workers, except while traveling away from home on business. Tax rates and tables See Publication 463 for information on deductible expenses while traveling away from home. Tax rates and tables Meals While Working Late You cannot deduct the cost of meals while working late. Tax rates and tables However, you may be able to claim a deduction if the cost of the meals is a deductible entertainment expense, or if you are traveling away from home. Tax rates and tables See Publication 463 for information on deductible entertainment expenses and expenses while traveling away from home. Tax rates and tables Personal Legal Expenses You cannot deduct personal legal expenses such as those for the following. Tax rates and tables Custody of children. Tax rates and tables Breach of promise to marry suit. Tax rates and tables Civil or criminal charges resulting from a personal relationship. Tax rates and tables Damages for personal injury (except certain whistleblower claims and unlawful discrimination claims). Tax rates and tables For more information about unlawful discrimination claims, see Deductions Subject to the 2% Limit, earlier. Tax rates and tables Preparation of a title (or defense or perfection of a title). Tax rates and tables Preparation of a will. Tax rates and tables Property claims or property settlement in a divorce. Tax rates and tables You cannot deduct these expenses even if a result of the legal proceeding is the loss of income-producing property. Tax rates and tables Political Contributions You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. Tax rates and tables Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible. Tax rates and tables Professional Accreditation Fees You cannot deduct professional accreditation fees such as the following. Tax rates and tables Accounting certificate fees paid for the initial right to practice accounting. Tax rates and tables Bar exam fees and incidental expenses in securing initial admission to the bar. Tax rates and tables Medical and dental license fees paid to get initial licensing. Tax rates and tables Professional Reputation You cannot deduct expenses of radio and TV appearances to increase your personal prestige or establish your professional reputation. Tax rates and tables 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. Tax rates and tables 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. Tax rates and tables 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. Tax rates and tables You cannot deduct these expenses even if you are attending the meeting to get information that would be useful in making further investments. Tax rates and tables Tax-Exempt Income Expenses You cannot deduct expenses to produce tax-exempt income. Tax rates and tables You cannot deduct interest on a debt incurred or continued to buy or carry tax-exempt securities. Tax rates and tables If you have expenses to p