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Department of the Treasury Contents

Internal Revenue Service


What's New . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Reminders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Publication 529
Cat. No. 15056o Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Miscellaneous
Deductions Subject to the 2% Limit . . . . . . . . . . . . 2
Unreimbursed Employee Expenses . . . . . . . . . . . 2
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 8

Deductions Deductions Not Subject to the 2% Limit . . . . . . . . 11


List of Deductions . . . . . . . . . . . . . . . . . . . . . . . 12
Nondeductible Expenses . . . . . . . . . . . . . . . . . . . 14
For use in preparing List of Nondeductible Expenses . . . . . . . . . . . . . 14
2016 Returns How To Report . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
How To Get Tax Help . . . . . . . . . . . . . . . . . . . . . . 18
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

What's New
Standard mileage rate. The 2016 rate for business use
of a vehicle is 54 cents per mile.
Educator expenses expanded. Beginning in 2016,
qualified educator expenses also include those expenses
you incur while participating in professional development
courses related to the curriculum in which you provide in-
struction. See Educator Expenses for more information
about educator expenses.

Reminders
Future developments. For the latest information about
developments related to Pub. 529, such as legislation
enacted after it was published, go to www.irs.gov/pub529.
Photographs of missing children. The Internal Reve-
nue Service is a proud partner with the National Center for
Missing & Exploited Children (NCMEC). Photographs of
missing children selected by the Center may appear in
this publication on pages that would otherwise be blank.
You can help bring these children home by looking at the
photographs and calling 1-800-THE-LOST
(1-800-843-5678) if you recognize a child.

Introduction
This publication explains which expenses you can claim
as miscellaneous itemized deductions on Schedule A
(Form 1040 or Form 1040NR). You must reduce the total
of most miscellaneous itemized deductions by 2% of your
Get forms and other information faster and easier at:
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Dec 23, 2016


adjusted gross income. This publication covers the follow- Useful Items
ing topics. You may want to see:
Deductions subject to the 2% limit.
Publication
Deductions not subject to the 2% limit.
463 Travel, Entertainment, Gift, and Car Expenses
Expenses you can't deduct.
How to report your deductions. 525 Taxable and Nontaxable Income
Some of the deductions previously discussed in this 535 Business Expenses
publication are adjustments to income rather than miscel-
587 Business Use of Your Home (Including Use by
laneous deductions. These include certain employee
Daycare Providers)
business expenses that must be listed on Form 2106 or
Form 2106-EZ and some that are entered directly on 946 How To Depreciate Property
Form 1040. Those deductions, which are discussed in
Pub. 463, Travel, Entertainment, Gift, and Car Expenses, Form (and Instructions)
include employee business expenses of officials paid on a
Schedule A (Form 1040) Itemized Deductions
fee basis and performing artists.
2106 Employee Business Expenses
Note. Generally, nonresident aliens are allowed mis-
cellaneous itemized deductions to the extent they are di- 2106-EZ Unreimbursed Employee Business
rectly related to income which is effectively connected Expenses
with the conduct of a trade or business within the United
See How To Get Tax Help near the end of this publication
States.
for information about getting these publications and forms.
You must keep records to verify your deductions.
You should keep receipts, canceled checks, sub-
RECORDS stitute checks, financial account statements, and

other documentary evidence.


Deductions Subject
to the 2% Limit
Comments and suggestions. We welcome your com-
ments about this publication and your suggestions for fu- You can deduct certain expenses as miscellaneous item-
ture editions. ized deductions on Schedule A (Form 1040 or Form
You can send us comments from irs.gov/formspubs. 1040NR). You can claim the amount of expenses that is
Click on More Information and then on Give us feed- more than 2% of your adjusted gross income. You figure
back. your deduction on Schedule A by subtracting 2% of your
Or you can write to: adjusted gross income from the total amount of these ex-
penses. Your adjusted gross income is the amount on
Internal Revenue Service Form 1040, line 38, or Form 1040NR, line 37.
Tax Forms and Publications
1111 Constitution Ave. NW, IR-6526 Generally, you apply the 2% limit after you apply any
Washington, DC 20224 other deduction limit. For example, you apply the 50% (or
80%) limit on business-related meals and entertainment
We respond to many letters by telephone. Therefore, it (discussed later under Travel, Transportation, Meals, En
would be helpful if you would include your daytime phone tertainment, Gifts, and Local Lodging) before you apply
number, including the area code, in your correspondence. the 2% limit.
Although we cannot respond individually to each com-
ment received, we do appreciate your feedback and will Deductions subject to the 2% limit are discussed in the
consider your comments as we revise our tax products. following three categories.
Unreimbursed employee expenses (Schedule A
Ordering forms and publications. Visit irs.gov/
(Form 1040), line 21 or Schedule A (Form 1040NR),
formspubs to download forms and publications. Other-
line 7).
wise, you can go to irs.gov/orderforms to order current
and prior-year forms and instructions. Your order should Tax preparation fees (Schedule A (Form 1040),
arrive within 10 business days. line 22 or Schedule A (Form 1040NR), line 8).
Tax questions. If you have a tax question not an- Other expenses (Schedule A (Form 1040), line 23 or
swered by this publication, check IRS.gov and How To Schedule A (Form 1040NR), line 9).
Get Tax Help at the end of this publication.
Unreimbursed Employee Expenses
Generally, the following expenses are deducted on
Schedule A (Form 1040), line 21, or Schedule A (Form
1040NR), line 7.

Page 2 Publication 529 (2016)


You can deduct only unreimbursed employee expen- Business Bad Debt
ses that are:
A business bad debt is a loss from a debt created or ac-
Paid or incurred during your tax year,
quired in your trade or business. Any other worthless debt
For carrying on your trade or business of being an em- is a business bad debt only if there is a very close relation-
ployee, and ship between the debt and your trade or business when
Ordinary and necessary. the debt becomes worthless.
An expense is ordinary if it is common and accepted in A debt has a very close relationship to your trade or
your trade, business, or profession. An expense is neces- business of being an employee if your main motive for in-
sary if it is appropriate and helpful to your business. An curring the debt is a business reason.
expense doesn't have to be required to be considered
necessary. Example. You make a bona fide loan to the corpora-
tion you work for. It fails to pay you back. You had to make
You may be able to deduct the following items as unre- the loan in order to keep your job. You have a business
imbursed employee expenses. bad debt as an employee.
Business bad debt of an employee.
More information. For more information on business
Business liability insurance premiums. bad debts, see chapter 10 in Pub. 535. For information on
Damages paid to a former employer for breach of an nonbusiness bad debts, see chapter 4 in Pub. 550, Invest-
employment contract. ment Income and Expenses.
Depreciation on a computer your employer requires
you to use in your work. Business Liability Insurance
Dues to a chamber of commerce if membership helps You can deduct insurance premiums you paid for protec-
you do your job. tion against personal liability for wrongful acts on the job.
Dues to professional societies.
Damages for Breach of Employment
Educator expenses. Contract
Home office or part of your home used regularly and
exclusively in your work. If you break an employment contract, you can deduct
damages you pay your former employer if the damages
Job search expenses in your present occupation. are attributable to the pay you received from that em-
Laboratory breakage fees. ployer.
Legal fees related to your job.
Depreciation on Computers
Licenses and regulatory fees.
You can claim a depreciation deduction for a computer
Malpractice insurance premiums.
that you use in your work as an employee if its use is:
Medical examinations required by an employer.
For the convenience of your employer, and
Occupational taxes.
Required as a condition of your employment.
Passport for a business trip.
For the convenience of your employer. This means
Repayment of an income aid payment received under that your use of the computer is for a substantial business
an employer's plan. reason of your employer. You must consider all facts in
Research expenses of a college professor. making this determination. Use of your computer during
Rural mail carriers' vehicle expenses. your regular working hours to carry on your employer's
business is generally for the convenience of your em-
Subscriptions to professional journals and trade mag- ployer.
azines related to your work.
Required as a condition of your employment. This
Tools and supplies used in your work.
means that you can't properly perform your duties without
Travel, transportation, meals, entertainment, gifts, and the computer. Whether you can properly perform your du-
local lodging related to your work. ties without it depends on all the facts and circumstances.
Union dues and expenses. It isnt necessary that your employer explicitly requires you
to use your computer. But neither is it enough that your
Work clothes and uniforms if required and not suitable employer merely states that your use of the item is a con-
for everyday use. dition of your employment.
Work-related education.
Example. You are an engineer with an engineering
firm. You occasionally take work home at night rather than
work late at the office. You own and use a computer that is

Publication 529 (2016) Page 3


similar to the one you use at the office to complete your Dues to Chambers of Commerce and
work at home. Since your use of the computer isn't for the Professional Societies
convenience of your employer and isn't required as a con-
dition of your employment, you can't claim a depreciation You may be able to deduct dues paid to professional or-
deduction for it. ganizations (such as bar associations and medical associ-
ations) and to chambers of commerce and similar organi-
Which depreciation method to use. The depreciation zations, if membership helps you carry out the duties of
method you use depends on whether you meet the your job. Similar organizations include:
more-than-50%-use test.
Boards of trade,
More-than-50%-use test met. You meet this test if
you use the computer more than 50% in your work. If you Business leagues,
meet this test, you can claim accelerated depreciation un- Civic or public service organizations,
der the General Depreciation System (GDS). In addition,
Real estate boards, and
you may be able to take the section 179 deduction for the
year you place the item in service. Trade associations.
More-than-50%-use test not met. If you don't meet
the more-than-50%-use test, you are limited to the straight Lobbying and political activities. You may not be able
line method of depreciation under the Alternative Depreci- to deduct that part of your dues that is for certain lobbying
ation System (ADS). You also can't claim the section 179 and political activities. See Lobbying Expenses under
deduction. (But if you use your computer in a home office, Nondeductible Expenses, later.
see the exception below.)
Investment use. Your use of a computer in connec- Educator Expenses
tion with investments (described later under Other Expen
ses) doesn't count as use in your work. However, you can If you were an eligible educator in 2016, you can deduct
combine your investment use with your work use in figur- up to $250 of qualified expenses you paid in 2016 as an
ing your depreciation deduction. adjustment to gross income on Form 1040, line 23, rather
than as a miscellaneous itemized deduction. If you file
Exception for computer used in a home office. Form 1040A, you can deduct these expenses on line 16. If
The more-than-50%-use test doesn't apply to a computer you and your spouse are filing jointly and both of you were
used only in a part of your home that meets the require- eligible educators, the maximum deduction is $500. How-
ments described later under Home Office. You can claim ever, neither spouse can deduct more than $250 of his or
accelerated depreciation using GDS for a computer used her qualified expenses.
in a qualifying home office, even if you don't use it more
than 50% in your work. You also may be able to take a Eligible educator. An eligible educator is a kindergarten
section 179 deduction for the year you place the computer through grade 12 teacher, instructor, counselor, principal,
in service. See Computer used in a home office under or aide in school for at least 900 hours during a school
How To Report, later. year.
More information. For more information on deprecia- Qualified expenses. Qualified expenses include ordi-
tion and the section 179 deduction for computers and nary and necessary expenses paid in connection with
other items used in a home office, see Business Furniture books, supplies, equipment (including computer equip-
and Equipment in Pub. 587. Pub. 946 has detailed infor- ment, software, and services), and other materials used in
mation about the section 179 deduction and depreciation the classroom. An ordinary expense is one that is com-
deductions using GDS and ADS. mon and accepted in your educational field. A necessary
expense is one that is helpful and appropriate for your
Reporting your depreciation deduction. See How To profession as an educator. An expense doesnt have to be
Report, later, for information about reporting a deduction required to be considered necessary.
for depreciation. Beginning in 2016, qualified expenses also include
You must keep records to prove your percentage those expenses you incur while participating in professio-
of business and investment use. nal development courses related to the curriculum in
RECORDS which you provide instruction. It also includes those ex-
penses related to those students for whom you provide
that instruction.
Qualified expenses dont include expenses for home
schooling or for nonathletic supplies for courses in health
or physical education. You must reduce your qualified ex-
penses by the following amounts.
Excludable U.S. series EE and I savings bond interest
from Form 8815.
Nontaxable qualified state tuition program earnings.

Page 4 Publication 529 (2016)


Nontaxable earnings from Coverdell education sav- Job Search Expenses
ings accounts.
You can deduct certain expenses you have in looking for
Any reimbursements you received for those expenses
a new job in your present occupation, even if you don't get
that werent reported to you on your Form W-2, box 1.
a new job. You can't deduct these expenses if:
Educator expenses over limit. If you were an educator You are looking for a job in a new occupation,
in 2016 and you had qualified expenses that you cant
There was a substantial break between the ending of
take as an adjustment to gross income, you can deduct
your last job and your looking for a new one, or
the rest as an itemized deduction subject to the 2% limit.
You are looking for a job for the first time.
Home Office
Employment and outplacement agency fees. You can
If you use a part of your home regularly and exclusively for deduct employment and outplacement agency fees you
business purposes, you may be able to deduct a part of pay in looking for a new job in your present occupation.
the operating expenses and depreciation of your home. Employer pays you back. If, in a later year, your em-
ployer pays you back for employment agency fees, you
You can claim this deduction for the business use of a
must include the amount you receive in your gross income
part of your home only if you use that part of your home
up to the amount of your tax benefit in the earlier year.
regularly and exclusively:
See Recoveries in Pub. 525.
As your principal place of business for any trade or
business, Employer pays the employment agency. If your
employer pays the fees directly to the employment agency
As a place to meet or deal with your patients, clients, and you aren't responsible for them, you don't include
or customers in the normal course of your trade or them in your gross income.
business, or
Rsum. You can deduct amounts you spend for prepar-
In the case of a separate structure not attached to
ing and mailing copies of a rsum to prospective employ-
your home, in connection with your trade or business.
ers if you are looking for a new job in your present occu-
The regular and exclusive business use must be for the pation.
convenience of your employer and not just appropriate
Travel and transportation expenses. If you travel to an
and helpful in your job.
area and, while there, you look for a new job in your
Principal place of business. If you have more than one present occupation, you may be able to deduct travel ex-
place of business, the business part of your home is your penses to and from the area. You can deduct the travel
principal place of business if: expenses if the trip is primarily to look for a new job. The
amount of time you spend on personal activity compared
You use it regularly and exclusively for administrative to the amount of time you spend in looking for work is im-
or management activities of your trade or business, portant in determining whether the trip is primarily per-
and sonal or is primarily to look for a new job.
You have no other fixed location where you conduct Even if you can't deduct the travel expenses to and
substantial administrative or management activities of from an area, you can deduct the expenses of looking for
your trade or business. a new job in your present occupation while in the area.
You can choose to use the standard mileage rate to fig-
Otherwise, the location of your principal place of busi-
ure your car expenses. The 2016 rate for business use of
ness generally depends on the relative importance of the
a vehicle is 54 cents per mile. See Pub. 463 for more in-
activities performed at each location and the time spent at
formation on travel and car expenses.
each location.
You should keep records that will give the infor- Legal Fees
mation needed to figure the deduction according
RECORDS to these rules. Also keep canceled checks, sub- You can deduct legal fees related to doing or keeping your
stitute checks, or account statements and receipts of the job.
expenses paid to prove the deductions you claim.
Licenses and Regulatory Fees
More information. See Pub. 587 for more detailed infor-
mation and a worksheet for figuring the deduction. 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.

Occupational Taxes
You can deduct an occupational tax charged at a flat rate
by a locality for the privilege of working or conducting a

Publication 529 (2016) Page 5


business in the locality. If you are an employee, you can Baggage charges, and
claim occupational taxes only as a miscellaneous deduc- Cleaning and laundry expenses.
tion subject to the 2% limit; you can't claim them as a de-
duction for taxes elsewhere on your return. Travel expenses are discussed more fully in chapter 1
of Pub. 463.
Repayment of Income Aid Payment Temporary work assignment. If your assignment or
job away from home in a single location is realistically ex-
An income aid payment is one that is received under an pected to last (and does in fact last) for 1 year or less, it is
employer's plan to aid employees who lose their jobs be- temporary, unless there are facts and circumstances that
cause of lack of work. If you repay a lump-sum income aid indicate it isn't.
payment that you received and included in income in an
earlier year, you can deduct the repayment. Indefinite work assignment. If your assignment or
job away from home in a single location is realistically ex-
Research Expenses of a College Professor pected to last for more than 1 year, it is indefinite, whether
or not it actually lasts for more than 1 year.
If you are a college professor, you can deduct your re-
search expenses, including travel expenses, for teaching, If your assignment or job away from home in a single
lecturing, or writing and publishing on subjects that relate location is realistically expected to last for 1 year or less,
directly to your teaching duties. You must have under- but at some later date it is realistically expected to exceed
taken the research as a means of carrying out the duties 1 year, it will be treated as temporary (in the absence of
expected of a professor and without expectation of profit facts and circumstances indicating otherwise) until the
apart from salary. However, you can't deduct the cost of date that your realistic expectation changes, and it will be
travel as a form of education. treated as indefinite after that date.
Federal crime investigation and prosecution. If
Rural Mail Carriers' Vehicle Expenses you are a federal employee participating in a federal crime
investigation or prosecution, you aren't subject to the
If your expenses to use a vehicle in performing services 1-year rule for deducting temporary travel expenses. This
as a rural mail carrier are more than the amount of your re- means that you may be able to deduct travel expenses
imbursements, you can deduct the unreimbursed expen- even if you are away from your tax home for more than 1
ses. See chapter 4 of Pub. 463 for more information. year.
To qualify, the Attorney General must certify that you
Tools Used in Your Work are traveling:

Generally, you can deduct amounts you spend for tools For the Federal Government,
used in your work if the tools wear out and are thrown In a temporary duty status, and
away within 1 year from the date of purchase. You can de- To investigate, prosecute, or provide support services
preciate the cost of tools that have a useful life substan- for the investigation or prosecution of a federal crime.
tially beyond the tax year. For more information about de-
preciation, see Pub. 946. Armed Forces reservists traveling more than 100
miles from home. If you are a member of a reserve com-
Travel, Transportation, Meals, ponent of the Armed Forces of the United States and you
Entertainment, Gifts, and Local Lodging travel more than 100 miles away from home in connection
with your performance of services as a member of the re-
If you are an employee and have ordinary and necessary serves, you can deduct some of your travel expenses as
business-related expenses for travel away from home, lo- an adjustment to gross income rather than as a miscella-
cal transportation, entertainment, and gifts, you may be neous itemized deduction. The amount of expenses you
able to deduct these expenses. Generally, you must file can deduct as an adjustment to gross income is limited to
Form 2106 or Form 2106-EZ to claim these expenses. the regular federal per diem rate (for lodging, meals, and
incidental expenses) and the standard mileage rate (for
Travel expenses. Travel expenses are those incurred car expenses) plus any parking fees, ferry fees, and tolls.
while traveling away from home for your employer. You The balance, if any, is reported on Schedule A.
can deduct travel expenses paid or incurred in connection You are a member of a reserve component of the
with a temporary work assignment. Generally, you can't Armed Forces of the United States if you are in the Army,
deduct travel expenses paid or incurred in connection with Naval, Marine Corps, Air Force, Coast Guard Reserve,
an indefinite work assignment. the Army National Guard of the United States, the Air Na-
Travel expenses may include: tional Guard of the United States, or the Reserve Corps of
The cost of getting to and from your business destina- the Public Health Service.
tion (air, rail, bus, car, etc.), For more information on travel expenses, see Pub.
463.
Meals and lodging while away from home,
Local transportation expenses. Local transportation
Taxi fares,
expenses are the expenses of getting from one workplace

Page 6 Publication 529 (2016)


to another when you aren't traveling away from home. hours of service limits. You apply this 80% limit before
They include the cost of transportation by air, rail, bus, you apply the 2%-of-adjusted-gross-income limit.
taxi, and the cost of using your car.
You can choose to use the standard mileage rate to fig- Gift expenses. You can generally deduct up to $25 of
ure your car expenses. The 2016 rate for business use of business gifts you give to any one individual during the
a vehicle is 54 cents per mile. year. The following items don't count toward the $25 limit.
In general, the costs of commuting between your Identical, widely distributed items costing $4 or less
residence and your place of business are nonde that have your name clearly and permanently imprin-
!
CAUTION ductible. ted.
Signs, racks, and promotional materials to be dis-
Work at two places in a day. If you work at two pla- played on the business premises of the recipient.
ces in a day, whether or not for the same employer, you
can generally deduct the expenses of getting from one Local lodging. If your employer provides or requires you
workplace to the other. to obtain lodging while you aren't traveling away from
home, you can deduct the cost of the lodging if it is:
Temporary work location. You can deduct expenses
incurred in going between your home and a temporary on a temporary basis,
work location if at least one of the following applies. necessary for you to participate in or be available for a
The work location is outside the metropolitan area business meeting or employer function, and
where you live and normally work. the costs are ordinary and necessary, but not lavish or
You have at least one regular work location (other extravagant.
than your home) for the same trade or business. (If If your employer provides the lodging or reimburses
this applies, the distance between your home and the you for the cost of the lodging, you can deduct the cost
temporary work location doesn't matter.) only if the value or the reimbursement is included in your
For this purpose, a work location is generally consid- gross income because it is reported as wages on your
ered temporary if your work there is realistically expected Form W-2.
to last (and does in fact last) for 1 year or less. It isn't tem-
porary if your work there is realistically expected to last for Additional information. See Pub. 463 for more informa-
more than 1 year, even if it actually lasts for 1 year or less. tion on travel, transportation, meal, entertainment, and gift
If your work there initially is realistically expected to last for expenses, and reimbursements for these expenses.
1 year or less, but later is realistically expected to last for
more than 1 year, the work location is generally consid- Union Dues and Expenses
ered temporary until the date your realistic expectation
changes and not temporary after that date. For more infor- You can deduct dues and initiation fees you pay for union
mation, see chapter 1 of Pub. 463. membership.

Home office. You can deduct expenses incurred in You can also deduct assessments for benefit payments
going between your home and a workplace if your home is to unemployed union members. However, you can't de-
your principal place of business for the same trade or duct the part of the assessments or contributions that pro-
business. (In this situation, whether the other workplace is vides funds for the payment of sick, accident, or death
temporary or regular and its distance from your home benefits. Also, you can't deduct contributions to a pension
don't matter.) See Home Office, earlier, for a discussion fund even if the union requires you to make the contribu-
on the use of your home as your principal place of busi- tions.
ness.
You may not be able to deduct amounts you pay to the
Meals and entertainment. Generally, you can deduct union that are related to certain lobbying and political ac-
entertainment expenses (including entertainment-related tivities. See Lobbying Expenses under Nondeductible Ex
meals) only if they are directly related to the active con- penses, later.
duct of your trade or business. However, the expense only
needs to be associated with the active conduct of your Work Clothes and Uniforms
trade or business if it directly precedes or follows a sub-
stantial and bona fide business-related discussion. You can deduct the cost and upkeep of work clothes if the
You can deduct only 50% of your business-related following two requirements are met.
meal and entertainment expenses unless the expenses You must wear them as a condition of your employ-
meet certain exceptions. You apply this 50% limit before ment.
you apply the 2%-of-adjusted-gross-income limit.
The clothes aren't suitable for everyday wear.
Meals when subject to hours of service limits.
You can deduct 80% of your business-related meal ex-
penses if you consume the meals during or incident to any
period subject to the Department of Transportation's

Publication 529 (2016) Page 7


It is required by your employer or the law to keep your
It isn't enough that you wear distinctive clothing.
salary, status, or job, and the requirement serves a
! The clothing must be specifically required by your
CAUTION employer. Nor is it enough that you don't, in fact,
business purpose of your employer.
wear your work clothes away from work. The clothing
must not be suitable for taking the place of your regular You can't deduct expenses you have for education,
clothing. even though one or both of the preceding tests are met, if
the education:

Examples of workers who may be able to deduct the Is needed to meet the minimum educational require-
ments to qualify you in your trade or business, or
cost and upkeep of work clothes are: delivery workers,
firefighters, health care workers, law enforcement officers, Is part of a program of study that will lead to qualifying
letter carriers, professional athletes, and transportation you in a new trade or business.
workers (air, rail, bus, etc.).
If your education qualifies, you can deduct expenses
Musicians and entertainers can deduct the cost of the- for tuition, books, supplies, laboratory fees, and similar
atrical clothing and accessories that aren't suitable for ev- items, and certain transportation costs.
eryday wear.
If the education qualifies you for a new trade or busi-
However, work clothing consisting of white cap, white ness, you can't deduct the educational expenses even if
shirt or white jacket, white bib overalls, and standard work you dont intend to enter that trade or business.
shoes, which a painter is required by his union to wear on
Travel as education. You can't deduct the cost of
the job, isn't distinctive in character or in the nature of a
travel that in itself constitutes a form of education. For ex-
uniform. Similarly, the costs of buying and maintaining
ample, a French teacher who travels to France to maintain
blue work clothes worn by a welder at the request of a
general familiarity with the French language and culture
foreman aren't deductible.
can't deduct the cost of the trip as an educational ex-
Protective clothing. You can deduct the cost of protec- pense.
tive clothing required in your work, such as safety shoes
More information. See Pub. 970, Tax Benefits for Edu-
or boots, safety glasses, hard hats, and work gloves.
cation, for a complete discussion of the deduction for
Examples of workers who may be required to wear
work-related education expenses.
safety items are: carpenters, cement workers, chemical
workers, electricians, fishing boat crew members, machi-
nists, oil field workers, pipe fitters, steamfitters, and truck Education Expenses During Unemployment
drivers.
If you stop working for a year or less in order to get educa-
Military uniforms. You generally can't deduct the cost of tion in order to maintain or improve skills needed in your
your uniforms if you are on full-time active duty in the present work and then return to the same general type of
armed forces. However, if you are an armed forces re- work, your absence is considered temporary. Education
servist, you can deduct the unreimbursed cost of your uni- that you get during a temporary absence is qualifying
form if military regulations restrict you from wearing it ex- work-related education if it maintains or improves skills
cept while on duty as a reservist. In figuring the deduction, needed in your present work.
you must reduce the cost by any nontaxable allowance
you receive for these expenses. Tax Preparation Fees
If local military rules don't allow you to wear fatigue uni-
forms when you are off duty, you can deduct the amount You can usually deduct tax preparation fees on the return
by which the cost of buying and keeping up these uni- for the year in which you pay them. Thus, on your 2016 re-
forms is more than the uniform allowance you receive. turn, you can deduct fees paid in 2016 for preparing your
If you are a student at an armed forces academy, you 2015 return. These fees include the cost of tax prepara-
can't deduct the cost of your uniforms if they replace regu- tion software programs and tax publications. They also in-
lar clothing. However, you can deduct the cost of insignia, clude any fee you paid for electronic filing of your return.
shoulder boards, and related items. See Tax preparation fees under How To Report, later.
You can deduct the cost of your uniforms if you are a
civilian faculty or staff member of a military school. Other Expenses
Work-Related Education You can deduct certain other expenses as miscellaneous
itemized deductions subject to the 2%-of-adjus-
You can deduct expenses you have for education, even if
ted-gross-income limit. On Schedule A (Form 1040),
the education may lead to a degree, if the education
line 23, or Schedule A (Form 1040NR), line 9, you can de-
meets at least one of the following two tests.
duct the ordinary and necessary expenses that you pay:
It maintains or improves skills required in your present
work. 1. To produce or collect income that must be included in
your gross income,

Page 8 Publication 529 (2016)


2. To manage, conserve, or maintain property held for an employee. First report the loss in Section B of Form
producing such income, or 4684, Casualties and Thefts. You may also have to in-
clude the loss on Form 4797, Sales of Business Property,
3. To determine, contest, pay, or claim a refund of any
if you are otherwise required to file that form. To figure
tax.
your deduction, add all casualty or theft losses from this
You can deduct expenses you pay for the purposes in (1) type of property included on Form 4684, lines 32 and 38b,
and (2) above only if they are reasonable and closely rela- or Form 4797, line 18a. For more information on casualty
ted to these purposes. and theft losses, see Pub. 547, Casualties, Disasters, and
Thefts.
These other expenses include the following items.
Appraisal fees for a casualty loss or charitable contri- Clerical Help and Office Rent
bution.
You can deduct office expenses, such as rent and clerical
Casualty and theft losses from property used in per-
help, that you have in connection with your investments
forming services as an employee.
and collecting the taxable income on them.
Clerical help and office rent in caring for investments.
Depreciation on home computers used for invest- Credit or Debit Card Convenience Fees
ments.
You can deduct the convenience fee charged by the card
Excess deductions (including administrative expen- processor for paying your income tax (including estimated
ses) allowed a beneficiary on termination of an estate tax payments) by credit or debit card. The fees are deduc-
or trust. tible on the return for the year in which you paid them. For
Fees to collect interest and dividends. example, fees charged to payments made in 2016 can be
claimed on the 2016 tax return.
Hobby expenses, but generally not more than hobby
income.
Depreciation on Home Computer
Indirect miscellaneous deductions from pass-through
entities. You can deduct depreciation on your home computer if
you use it to produce income (for example, to manage
Investment fees and expenses.
your investments that produce taxable income). You gen-
Legal fees related to producing or collecting taxable erally must depreciate the computer using the straight line
income or getting tax advice. method over the Alternative Depreciation System (ADS)
Loss on deposits in an insolvent or bankrupt financial recovery period. But if you work as an employee and also
institution. use the computer in that work, see Depreciation on Com
puters under Unreimbursed Employee Expenses, earlier.
Loss on traditional IRAs or Roth IRAs, when all For more information on depreciation, see Pub. 946.
amounts have been distributed to you.
Repayments of income. Excess Deductions of an Estate
Repayments of social security benefits. If an estate's total deductions in its last tax year are more
Safe deposit box rental, except for storing jewelry and than its gross income for that year, the beneficiaries suc-
other personal effects. ceeding to the estate's property can deduct the excess.
Don't include deductions for the estate's personal exemp-
Service charges on dividend reinvestment plans. tion and charitable contributions when figuring the estate's
Tax advice fees. total deductions. The beneficiaries can claim the deduc-
tion only for the tax year in which, or with which, the estate
Trustee's fees for your IRA, if separately billed and
terminates, whether the year of termination is a normal
paid.
year or a short tax year. For more information, see Termi
If the expenses you pay produce income that is only parti- nation of Estate in Pub. 559, Survivors, Executors, and
ally taxable, see TaxExempt Income Expenses, later, un- Administrators.
der Nondeductible Expenses.
Fees To Collect Interest and Dividends
Appraisal Fees
You can deduct fees you pay to a broker, bank, trustee, or
You can deduct appraisal fees if you pay them to figure a similar agent to collect your taxable bond interest or divi-
casualty loss or the fair market value of donated property. dends on shares of stock. But you can't deduct a fee you
pay to a broker to buy investment property, such as stocks
Casualty and Theft Losses or bonds. You must add the fee to the cost of the property.

You can deduct a casualty or theft loss as a miscellane- You can't deduct the fee you pay to a broker to sell se-
ous itemized deduction subject to the 2% limit if you used curities. You can use the fee only to figure gain or loss
the damaged or stolen property in performing services as

Publication 529 (2016) Page 9


from the sale. See the instructions for Schedule D (Form your share of gross income and investment expenses.
1040) for information on how to report the fee. You can claim the expenses only as a miscellaneous
itemized deduction subject to the 2% limit.
Hobby Expenses
Investment Fees and Expenses
You can generally deduct hobby expenses, but only up to
the amount of hobby income. A hobby isn't a business be- You can deduct investment fees, custodial fees, trust ad-
cause it isn't carried on to make a profit. See NotforProfit ministration fees, and other expenses you paid for manag-
Activities in chapter 1 of Pub. 535. ing your investments that produce taxable income.

Indirect Deductions of Pass-Through Legal Expenses


Entities
You can usually deduct legal expenses that you incur in
Pass-through entities include partnerships, S corpora- attempting to produce or collect taxable income or that
tions, and mutual funds that aren't publicly offered. De- you pay in connection with the determination, collection,
ductions of pass-through entities are passed through to or refund of any tax.
the partners or shareholders. The partners or sharehold-
ers can deduct their share of passed-through deductions You can also deduct legal expenses that are:
for investment expenses as miscellaneous itemized de- Related to either doing or keeping your job, such as
ductions subject to the 2% limit. those you paid to defend yourself against criminal
charges arising out of your trade or business,
Example. You are a member of an investment club
that is formed solely to invest in securities. The club is For tax advice related to a divorce if the bill specifies
treated as a partnership. The partnership's income is how much is for tax advice and it is determined in a
solely from taxable dividends, interest, and gains from reasonable way, or
sales of securities. In this case, you can deduct your To collect taxable alimony.
share of the partnership's operating expenses as miscel-
laneous itemized deductions subject to the 2% limit. How- You can deduct expenses of resolving tax issues relat-
ever, if the investment club partnership has investments ing to profit or loss from business (Schedule C or C-EZ),
that also produce nontaxable income, you can't deduct rentals or royalties (Schedule E), or farm income and ex-
your share of the partnership's expenses that produce the penses (Schedule F) on the appropriate schedule. You
nontaxable income. deduct expenses of resolving nonbusiness tax issues on
Schedule A (Form 1040 or Form 1040NR). See Tax Prep
Publicly offered mutual funds. Publicly offered mutual aration Fees, earlier.
funds don't pass deductions for investment expenses
through to shareholders. A mutual fund is publicly of- Unlawful discrimination claims. You may be able to
fered if it is: deduct, as an adjustment to income on Form 1040,
line 36, or Form 1040NR, line 35, rather than as a miscel-
Continuously offered pursuant to a public offering,
laneous itemized deduction, attorney fees and court costs
Regularly traded on an established securities market, for actions settled or decided after October 22, 2004, in-
or volving a claim of unlawful discrimination, a claim against
Held by or for at least 500 persons at all times during the U.S. Government, or a claim made under section
the tax year. 1862(b)(3)(A) of the Social Security Act. However, the
amount you can deduct on Form 1040, line 36, or Form
A publicly offered mutual fund will send you a Form 1040NR, line 35, is limited to the amount of the judgment
1099-DIV, Dividends and Distributions, or a substitute or settlement you are including in income for the tax year.
form, showing the net amount of dividend income (gross See Pub. 525 for more information.
dividends minus investment expenses). This net figure is
the amount you report on your return as income. You can't
Loss on Deposits
further deduct investment expenses related to publicly of-
fered mutual funds because they are already included as A loss on deposits can occur when a bank, credit union, or
part of the net income amount. other financial institution becomes insolvent or bankrupt. If
you can reasonably estimate the amount of your loss on
Information returns. You should receive information re-
money you have on deposit in a financial institution that
turns from pass-through entities.
becomes insolvent or bankrupt, you can generally choose
Partnerships and S corporations. These entities is- to deduct it in the current year even though its exact
sue Schedule K-1, which lists the items and amounts you amount hasn't been finally determined. If elected, the
must report, and identifies the tax return schedules and casualty loss is subject to certain deduction limitations.
lines to use. The election is made on Form 4684. Once you make this
choice, you can't change it without IRS approval.
Nonpublicly offered mutual funds. These funds will
send you a Form 1099-DIV, or a substitute form, showing

Page 10 Publication 529 (2016)


If none of the deposit is federally insured, you can de- Repayments of Social Security Benefits
duct the loss in either of the following ways.
If the total of the amounts in box 5 (net benefits for 2016)
As an ordinary loss (as a miscellaneous itemized de-
of all your Forms SSA-1099, Social Security Benefit State-
duction subject to the 2% limit). Write the name of the
ment, and Forms RRB-1099, Payments By the Railroad
financial institution and Insolvent Financial Institution
Retirement Board, is a negative figure (a figure in paren-
beside the amount on Schedule A (Form 1040),
theses), you may be able to take a miscellaneous item-
line 23, or Schedule A (Form 1040NR), line 9. This de-
ized deduction subject to the 2% limit. The amount you
duction is limited to $20,000 ($10,000 if you are mar-
can deduct is the part of the negative figure that repre-
ried filing separately) for each financial institution, re-
sents an amount you included in gross income in an ear-
duced by any expected state insurance proceeds.
lier year.
As a casualty loss. Report it on Form 4684 first and
then on Schedule A (Form 1040). See Pub. 547 for The amount in box 5 of Form SSA-1099 or RRB-1099
details. is the net amount of your benefits for the year. It will be a
negative figure if the amount of benefits you repaid in
As a nonbusiness bad debt. Report it on Schedule D 2016 (box 4) is more than the gross amount of benefits
(Form 1040). paid to you in 2016 (box 3).
If any part of the deposit is federally insured, you can If the deduction is more than $3,000, you will have
deduct the loss only as a casualty loss. ! to use a special computation to figure your tax.
CAUTION See Pub. 915, Social Security and Equivalent
Exception. You can't make this choice if you are a Railroad Retirement Benefits, for additional information.
1%-or-more owner or an officer of the financial institution,
or are related to such owner or officer. For a definition of
related, see Deposit in Insolvent or Bankrupt Financial Safe Deposit Box Rent
Institution in chapter 4 of Pub. 550.
You can deduct safe deposit box rent if you use the box to
Actual loss different from estimated loss. If you make store taxable income-producing stocks, bonds, or invest-
this choice and your actual loss is less than your estima- ment-related papers and documents. You can't deduct the
ted loss, you must include the excess in income. See Re rent if you use the box only for jewelry, other personal
coveries in Pub. 525. If your actual loss is more than your items, or tax-exempt securities.
estimated loss, treat the excess loss as explained under
Choice not made, next. Service Charges on Dividend
Reinvestment Plans
Choice not made. If you don't make this choice (or if you
have an excess actual loss after choosing to deduct your You can deduct service charges you pay as a subscriber
estimated loss), treat your loss (or excess loss) as a non- in a dividend reinvestment plan. These service charges in-
business bad debt (deductible as a short-term capital clude payments for:
loss) in the year its amount is finally determined. See Non
business Bad Debts in chapter 4 of Pub. 550. Holding shares acquired through a plan,
Collecting and reinvesting cash dividends, and
Loss on IRA Keeping individual records and providing detailed
statements of accounts.
If you have a loss on your traditional IRA (or Roth IRA) in-
vestment, you can deduct the loss as a miscellaneous
itemized deduction subject to the 2% limit, but only when Trustee's Administrative Fees for IRA
all the amounts in all your traditional IRA (or Roth IRA) ac-
Trustee's administrative fees that are billed separately and
counts have been distributed to you and the total distribu-
paid by you in connection with your IRA are deductible (if
tions are less than your unrecovered basis. For more in-
they are ordinary and necessary) as a miscellaneous
formation, see Pub. 590-B, Distributions from Individual
itemized deduction subject to the 2% limit.
Retirement Arrangements (IRAs).

Repayments of Income
Deductions Not Subject
If you had to repay an amount that you included in income
in an earlier year, you may be able to deduct the amount to the 2% Limit
you repaid. If the amount you had to repay was ordinary
income of $3,000 or less, the deduction is subject to the You can deduct the items listed below as miscellaneous
2% limit. If it was more than $3,000, see Repayments Un itemized deductions. They aren't subject to the 2% limit.
der Claim of Right under Deductions Not Subject to the Report these items on Schedule A (Form 1040), line 28,
2% Limit, later. or Schedule A (Form 1040NR), line 14.

Publication 529 (2016) Page 11


List of Deductions Pre-1998 choice to amortize bond premium. If
! you made the choice to amortize the premium on
Amortizable premium on taxable bonds. CAUTION taxable bonds before 1998, you can deduct the

Casualty and theft losses from income-producing bond premium amortization that is more than your interest
property. income only for bonds acquired during 1998 and later
years.
Federal estate tax on income in respect of a dece-
dent.
More information. For more information on bond pre-
Gambling losses up to the amount of gambling win- mium, see Bond Premium Amortization in chapter 3 of
nings. Pub. 550.
Impairment-related work expenses of persons with
disabilities. Casualty and Theft Losses of
Loss from other activities from Schedule K-1 (Form Income-Producing Property
1065-B), box 2.
You can deduct a casualty or theft loss as a miscellane-
Losses from Ponzi-type investment schemes. ous itemized deduction not subject to the 2% limit if the
Repayments of more than $3,000 under a claim of damaged or stolen property was income-producing prop-
right. erty (property held for investment, such as stocks, notes,
bonds, gold, silver, vacant lots, and works of art). First re-
Unrecovered investment in an annuity. port the loss in Section B of Form 4684. You may also
have to include the loss on Form 4797, Sales of Business
Amortizable Premium on Taxable Bonds Property, if you are otherwise required to file that form. To
figure your deduction, add all casualty or theft losses from
In general, if the amount you pay for a bond is greater than this type of property included on Form 4684, lines 32 and
its stated principal amount, the excess is bond premium. 38b, or Form 4797, line 18a. For more information on
You can elect to amortize the premium on taxable bonds. casualty and theft losses, see Pub. 547.
The amortization of the premium is generally an offset to
interest income on the bond rather than a separate deduc- Federal Estate Tax on Income in Respect of
tion item.
a Decedent
Pre-1998 election to amortize bond premium. Gener-
You can deduct the federal estate tax attributable to in-
ally, if you first elected to amortize bond premium before
come in respect of a decedent that you as a beneficiary
1998, the above treatment of the premium doesn't apply
include in your gross income. Income in respect of the de-
to bonds you acquired before 1988.
cedent is gross income that the decedent would have re-
Bonds acquired after October 22, 1986, and before ceived had death not occurred and that wasn't properly in-
1988. The amortization of the premium on these bonds is cludible in the decedent's final income tax return. See
investment interest expense subject to the investment in- Pub. 559 for information about figuring the amount of this
terest limit, unless you chose to treat it as an offset to in- deduction.
terest income on the bond.
Bonds acquired before October 23, 1986. The am- Gambling Losses Up to the Amount of
ortization of the premium on these bonds is a miscellane- Gambling Winnings
ous itemized deduction not subject to the 2% limit.
You must report the full amount of your gambling winnings
Deduction for excess premium. On certain bonds for the year on Form 1040, line 21. You deduct your gam-
(such as bonds that pay a variable rate of interest or that bling losses for the year on Schedule A (Form 1040),
provide for an interest-free period), the amount of bond line 28. You can't deduct gambling losses that are more
premium allocable to a period may exceed the amount of than your winnings. Generally, nonresident aliens can't
stated interest allocable to the period. If this occurs, treat deduct gambling losses on Schedule A (Form 1040NR).
the excess as a miscellaneous itemized deduction that You can't reduce your gambling winnings by your
isn't subject to the 2% limit. However, the amount deducti- gambling losses and report the difference. You
ble is limited to the amount by which your total interest in-
!
CAUTION must report the full amount of your winnings as in
clusions on the bond in prior periods exceed the total come and claim your losses (up to the amount of win
amount you treated as a bond premium deduction on the nings) as an itemized deduction. Therefore, your records
bond in prior periods. If any of the excess bond premium should show your winnings separately from your losses.
can't be deducted because of the limit, this amount is car-
ried forward to the next period and is treated as bond pre- Diary of winnings and losses. You must keep
mium allocable to that period. an accurate diary or similar record of your losses
RECORDS and winnings.

Page 12 Publication 529 (2016)


walking, speaking, breathing, learning, and working, you
Your diary should contain at least the following informa-
can deduct your impairment-related work expenses.
tion.
The date and type of your specific wager or wagering Impairment-related work expenses are ordinary and
activity. necessary business expenses for attendant care services
The name and address or location of the gambling es- at your place of work and other expenses in connection
tablishment. with your place of work that are necessary for you to be
able to work.
The names of other persons present with you at the
gambling establishment. Example. You are blind. You must use a reader to do
your work. You use the reader both during your regular
The amount(s) you won or lost.
working hours at your place of work and outside your reg-
Proof of winnings and losses. In addition to your diary, ular working hours away from your place of work. The
you should also have other documentation. You can gen- reader's services are only for your work. You can deduct
erally prove your winnings and losses through Form your expenses for the reader as impairment-related work
W-2G, Certain Gambling Winnings; Form 5754, State- expenses.
ment by Person(s) Receiving Gambling Winnings; wager-
Self-employed. If you are self-employed, enter your im-
ing tickets; canceled checks; substitute checks; credit re-
pairment-related work expenses on the appropriate form
cords; bank withdrawals; and statements of actual
(Schedule C, C-EZ, E, or F) used to report your business
winnings or payment slips provided to you by the gam-
income and expenses.
bling establishment.
For specific wagering transactions, you can use the fol- See Impairmentrelated work expenses, later under
lowing items to support your winnings and losses. How To Report.
These recordkeeping suggestions are intended
! as general guidelines to help you establish your Loss From Other Activities From
CAUTION winnings and losses. They aren't allinclusive.
Schedule K-1 (Form 1065-B), Box 2
Your tax liability depends on your particular facts and cir
cumstances. If the amount reported in Schedule K-1 (Form 1065-B),
box 2, is a loss, report it on Schedule A (Form 1040),
Keno. Copies of the keno tickets you purchased that line 28, or Schedule A (Form 1040NR), line 14 (only if ef-
were validated by the gambling establishment, copies of fectively connected with a U.S. trade or business). It isn't
your casino credit records, and copies of your casino subject to the passive activity limitations.
check cashing records.
Slot machines. A record of the machine number and Officials Paid on a Fee Basis
all winnings by date and time the machine was played.
If you are a fee-basis official, you can claim your expenses
Table games (twenty-one (blackjack), craps, in performing services in that job as an adjustment to in-
poker, baccarat, roulette, wheel of fortune, etc.). The come rather than as a miscellaneous itemized deduction.
number of the table at which you were playing. Casino See Pub. 463 for more information.
credit card data indicating whether the credit was issued
in the pit or at the cashier's cage. Performing Artists
Bingo. A record of the number of games played, cost
If you are a qualified performing artist, you can deduct
of tickets purchased, and amounts collected on winning
your employee business expenses as an adjustment to in-
tickets. Supplemental records include any receipts from
come rather than as a miscellaneous itemized deduction.
the casino, parlor, etc.
If you are an employee, complete Form 2106 or Form
Racing (horse, harness, dog, etc.). A record of the 2106-EZ. See Pub. 463 for more information.
races, amounts of wagers, amounts collected on winning
tickets, and amounts lost on losing tickets. Supplemental Losses From Ponzi-type Investment
records include unredeemed tickets and payment records Schemes
from the racetrack.
These losses are deductible as theft losses of in-
Lotteries. A record of ticket purchases, dates, win-
come-producing property on your tax return for the year
nings, and losses. Supplemental records include unre-
the loss was discovered. You figure the deductible loss in
deemed tickets, payment slips, and winnings statements.
Section B of Form 4684. However, if you qualify to use
Revenue Procedure 2009-20 (as modified by Revenue
Impairment-Related Work Expenses Procedure 2011-58) and you choose to follow the proce-
dures in the guidance, complete Section C of Form 4684
If you have a physical or mental disability that limits your
before completing Section B. Section C of Form 4684 re-
being employed, or substantially limits one or more of your
places Appendix A in Revenue Procedure 2009-20. You
major life activities, such as performing manual tasks,
don't need to complete Appendix A. See the Form 4684

Publication 529 (2016) Page 13


instructions and Pub. 547, Casualties, Disasters, and Lost or misplaced cash or property.
Thefts, for more information. Lunches with co-workers.
Repayments Under Claim of Right Meals while working late.
Medical expenses as business expenses other than
If you had to repay more than $3,000 that you included in medical examinations required by your employer.
your income in an earlier year because at the time you
thought you had an unrestricted right to it, you may be Personal disability insurance premiums.
able to deduct the amount you repaid, or take a credit Personal legal expenses.
against your tax. See Repayments in Pub. 525 for more
information. Personal, living, or family expenses.
Political contributions.
Unrecovered Investment in Annuity Professional accreditation fees.
A retiree who contributed to the cost of an annuity can ex- Professional reputation, expenses to improve.
clude from income a part of each payment received as a Relief fund contributions.
tax-free return of the retiree's investment. If the retiree
dies before the entire investment is recovered tax free, Residential telephone line.
any unrecovered investment can be deducted on the retir- Stockholders' meeting, expenses of attending.
ee's final income tax return. See Pub. 575, Pension and
Annuity Income, for more information about the tax treat- Tax-exempt income, expenses of earning or collect-
ment of pensions and annuities. ing.
The value of wages never received or lost vacation
time.
Nondeductible Expenses Travel expenses for another individual.

You can't deduct the following expenses. Voluntary unemployment benefit fund contributions.
Wristwatches.
List of Nondeductible Expenses
Adoption Expenses
Adoption expenses.
You can't deduct the expenses of adopting a child but you
Broker's commissions. may be able to take a credit for those expenses. For de-
Burial or funeral expenses, including the cost of a tails, see Form 8839, Qualified Adoption Expenses.
cemetery lot.
Campaign expenses.
Commissions
Capital expenses. Commissions paid on the purchase of securities aren't de-
ductible, either as business or nonbusiness expenses. In-
Check-writing fees. stead, these fees must be added to the taxpayer's cost of
Club dues. the securities. Commissions paid on the sale are deducti-
ble as business expenses only by dealers.
Commuting expenses.
Fees and licenses, such as car licenses, marriage li- Campaign Expenses
censes, and dog tags.
Fines and penalties, such as parking tickets. You can't deduct campaign expenses of a candidate for
any office, even if the candidate is running for reelection to
Health spa expenses. the office. These include qualification and registration fees
Hobby lossesbut see Hobby Expenses, earlier. for primary elections.
Home repairs, insurance, and rent. Legal fees. You can't deduct legal fees paid to defend
Home security system. charges that arise from participation in a political cam-
paign.
Illegal bribes and kickbackssee Bribes and kick
backs in chapter 11 of Pub. 535. Capital Expenses
Investment-related seminars.
You can't currently deduct amounts paid to buy property
Life insurance premiums paid by the insured. that has a useful life substantially beyond the tax year or
Lobbying expenses. amounts paid to increase the value or prolong the life of
property. If you use such property in your work, you may
Losses from the sale of your home, furniture, personal
car, etc.

Page 14 Publication 529 (2016)


be able to take a depreciation deduction. See Pub. 946. If Investment-Related Seminars
the property is a car used in your work, also see Pub. 463.
You can't deduct any expenses for attending a conven-
Check-Writing Fees on Personal Account tion, seminar, or similar meeting for investment purposes.

If you have a personal checking account, you can't deduct Life Insurance Premiums
fees charged by the bank for the privilege of writing
checks, even if the account pays interest. You can't deduct premiums you pay on your life insur-
ance. You may be able to deduct, as alimony, premiums
Club Dues you pay on life insurance policies assigned to your former
spouse. See Pub. 504, Divorced or Separated Individuals,
Generally, you can't deduct the cost of membership in any for information on alimony.
club organized for business, pleasure, recreation, or other
social purpose. This includes business, social, athletic, Lobbying Expenses
luncheon, sporting, airline, hotel, golf, and country clubs.
You generally can't deduct amounts paid or incurred for
You can't deduct dues paid to an organization if one of lobbying expenses. These include expenses to:
its main purposes is to:
1. Influence legislation,
Conduct entertainment activities for members or their
guests, or 2. Participate, or intervene, in any political campaign for,
or against, any candidate for public office,
Provide members or their guests with access to enter-
tainment facilities. 3. Attempt to influence the general public, or segments
of the public, about elections, legislative matters, or
Dues paid to airline, hotel, and luncheon clubs aren't referendums, or
deductible.
4. Communicate directly with covered executive branch
officials in any attempt to influence the official actions
Commuting Expenses or positions of those officials.

You can't deduct commuting expenses (the cost of trans- Lobbying expenses also include any amounts paid or
portation between your home and your main or regular incurred for research, preparation, planning, or coordina-
place of work). If you haul tools, instruments, or other tion of any of these activities.
items in your car to and from work, you can deduct only
the additional cost of hauling the items, such as the rent Covered executive branch official. A covered execu-
on a trailer to carry the items. tive branch official, for the purpose of (4) above, is any of
the following officials.
Fines or Penalties The President.
The Vice President.
You can't deduct fines or penalties you pay to a govern-
mental unit for violating a law. This includes an amount Any officer or employee of the White House Office of
paid in settlement of your actual or potential liability for a the Executive Office of the President, and the two
fine or penalty (civil or criminal). Fines or penalties include most senior level officers of each of the other agen-
parking tickets, tax penalties, and penalties deducted cies in the Executive Office.
from teachers' paychecks after an illegal strike. Any individual serving in a position in Level I of the Ex-
ecutive Schedule under section 5312 of Title 5, United
Health Spa Expenses States Code, any other individual designated by the
President as having Cabinet-level status, and any im-
You can't deduct health spa expenses, even if there is a
mediate deputy of one of these individuals.
job requirement to stay in excellent physical condition,
such as might be required of a law enforcement officer. Dues used for lobbying. If a tax-exempt organization
notifies you that part of the dues or other amounts you pay
Home Security System to the organization are used to pay nondeductible lobby-
ing expenses, you can't deduct that part.
You can't deduct the cost of a home security system as a
miscellaneous deduction. However, you may be able to Exceptions. You can deduct certain lobbying expenses
claim a deduction for a home security system as a busi- if they are ordinary and necessary expenses of carrying
ness expense if you have a home office. See Home Office on your trade or business.
under Unreimbursed Employee Expenses, earlier, and
You can deduct expenses for attempting to influence
Pub. 587.
the legislation of any local council or similar governing
body (local legislation). An Indian tribal government is
considered a local council or similar governing body.

Publication 529 (2016) Page 15


You can deduct in-house expenses for influencing Political Contributions
legislation or communicating directly with a covered
executive branch official if the expenses for the tax You can't deduct contributions made to a political candi-
year aren't more than $2,000 (not counting overhead date, a campaign committee, or a newsletter fund. Adver-
expenses). tisements in convention bulletins and admissions to din-
ners or programs that benefit a political party or political
If you are a professional lobbyist, you can deduct the
candidate aren't deductible.
expenses you incur in the trade or business of lobby-
ing on behalf of another person. Payments by the
other person to you for lobbying activities can't be de- Professional Accreditation Fees
ducted.
You can't deduct professional accreditation fees such as
the following.
Lost or Mislaid Cash or Property
Accounting certificate fees paid for the initial right to
You can't deduct a loss based on the mere disappearance practice accounting.
of money or property. However, an accidental loss or dis- Bar exam fees and incidental expenses in securing in-
appearance of property can qualify as a casualty if it re- itial admission to the bar.
sults from an identifiable event that is sudden, unexpec-
ted, or unusual. See Pub. 547. Medical and dental license fees paid to get initial li-
censing.
Example. A car door is accidentally slammed on your
hand, breaking the setting of your diamond ring. The dia- Professional Reputation
mond falls from the ring and is never found. The loss of
the diamond is a casualty. You can't deduct expenses of radio and TV appearances
to increase your personal prestige or establish your pro-
Lunches With Co-workers fessional reputation.

You can't deduct the expenses of lunches with co-work- Relief Fund Contributions
ers, except while traveling away from home on business.
See Pub. 463 for information on deductible expenses You can't deduct contributions paid to a private plan that
while traveling away from home. pays benefits to any covered employee who can't work
because of any injury or illness not related to the job.
Meals While Working Late
Residential Telephone Service
You can't deduct the cost of meals while working late.
However, you may be able to claim a deduction if the cost You can't deduct any charge (including taxes) for basic lo-
of the meals is a deductible entertainment expense, or if cal telephone service for the first telephone line to your
you are traveling away from home. See Pub. 463 for infor- residence, even if it is used in a trade or business.
mation on deductible entertainment expenses and expen-
ses while traveling away from home. Stockholders' Meetings
Personal Legal Expenses You can't deduct transportation and other expenses you
pay to attend stockholders' meetings of companies in
You can't deduct personal legal expenses such as those which you own stock but have no other interest. You can't
for the following. deduct these expenses even if you are attending the
Custody of children. meeting to get information that would be useful in making
further investments.
Breach of promise to marry suit.
Civil or criminal charges resulting from a personal re- Tax-Exempt Income Expenses
lationship.
You can't deduct expenses to produce tax-exempt in-
Damages for personal injury (except certain whistle- come. You can't deduct interest on a debt incurred or con-
blower claims and unlawful discrimination claims). For tinued to buy or carry tax-exempt securities.
more information about unlawful discrimination claims,
see Deductions Subject to the 2% Limit, earlier. If you have expenses to produce both taxable and
Preparation of a title (or defense or perfection of a ti- tax-exempt income, but you can't identify the expenses
tle). that produce each type of income, you must divide the ex-
penses based on the amount of each type of income to
Preparation of a will. determine the amount that you can deduct.
Property claims or property settlement in a divorce.
Example. During the year, you received taxable inter-
You can't deduct these expenses even if a result of the est of $4,800 and tax-exempt interest of $1,200. In earn-
legal proceeding is the loss of income-producing property. ing this income, you had total expenses of $500 during the

Page 16 Publication 529 (2016)


year. You can't identify the amount of each expense item 3. You are an individual with a disability and are claiming
that is for each income item. Therefore, 80% impairment-related work expenses. See Impair
($4,800/$6,000) of the expense is for the taxable interest mentrelated work expenses, later.
and 20% ($1,200/$6,000) is for the tax-exempt interest.
4. You have travel expenses as a member of the Armed
You can deduct, subject to the 2% limit, expenses of $400
Forces reserves that you can deduct as an adjust-
(80% of $500).
ment to gross income.
Travel Expenses for Another Individual 5. You are claiming job-related vehicle, travel, transpor-
tation, meal, or entertainment expenses. This doesn't
You generally can't deduct travel expenses you pay or in- apply if either of the following is true.
cur for a spouse, dependent, or other individual who ac-
companies you (or your employee) on personal or busi- a. None of your expenses are deductible because of
ness travel unless the spouse, dependent, or other the 2% limit on miscellaneous itemized deduc-
individual is an employee of the taxpayer, the travel is for tions.
a bona fide business purpose, and such expenses would b. Your only entry on Form 2106 or Form 2106-EZ is
otherwise be deductible by the spouse, dependent, or on line 4. If this is true and (a) above isn't true, en-
other individual. See Pub. 463 for more information on de- ter the expenses directly on Schedule A (Form
ductible travel expenses. 1040), line 21, or Schedule A (Form 1040NR),
line 7.
Voluntary Unemployment Benefit Fund Who can use Form 2106-EZ. You can use the
Contributions shorter Form 2106-EZ instead of Form 2106 if both of the
following apply.
You can't deduct voluntary unemployment benefit fund
contributions you make to a union fund or a private fund. 1. You aren't reimbursed by your employer for any ex-
However, you can deduct contributions as taxes if state penses. (Amounts your employer included as wages
law requires you to make them to a state unemployment on your Form W-2, box 1, aren't considered reim-
fund that covers you for the loss of wages from unemploy- bursements.)
ment caused by business conditions.
2. Either:
Wristwatches a. You aren't claiming vehicle expense, or

You can't deduct the cost of a wristwatch, even if there is b. You are using the standard mileage rate for your
a job requirement that you know the correct time to prop- vehicle.
erly perform your duties.
Armed Forces reservists. If you have reserve-related
travel that takes you more than 100 miles from home, you
should first complete Form 2106 or Form 2106-EZ. See
How To Report Pub. 463 for more information.

You must itemize deductions on Schedule A (Form 1040 Depreciation. Use Part V of Form 4562, Depreciation
or Form 1040NR) to claim miscellaneous deductions. and Amortization, to claim the depreciation deduction for
a computer that you didn't use only in your home office.
Report your miscellaneous deductions subject to the
Complete Form 4562, Part I, if you are claiming a section
2% limit on lines 21 through 23 and the total on
179 deduction. However, if you file Form 2106 or Form
line 24 for Form 1040, or lines 7 through 9 and the to-
2106-EZ, claim your depreciation deduction on that form
tal on line 10 for Form 1040NR.
and not on Form 4562.
Report your miscellaneous deductions not subject to
Computer used in a home office. Use Form 4562,
the 2% limit on line 28 for Form 1040, or line 14 for
Part III, to claim the depreciation deduction for a computer
Form 1040NR.
you placed in service during 2016 and used only in your
See Instructions for Schedule A in your Form 1040 or home office. Complete Form 4562, Part I, if you are claim-
Form 1040NR instruction booklet for more information. ing a section 179 deduction.
Don't use Form 4562 to claim the depreciation deduc-
Form 2106 and Form 2106-EZ. If you have deductible tion for a computer you placed in service before 2016 and
employee business expenses, you usually must file either used only in your home office, unless you are otherwise
Form 2106 or Form 2106-EZ. required to file Form 4562. Instead, report the deprecia-
You must file Form 2106 or Form 2106-EZ if any of the tion directly on the appropriate form. But if you are other-
following applies to you. wise required to file Form 4562, report the depreciation in
1. You are a qualified performing artist claiming perform- Part III, line 17.
ing-artist-related expenses.
Impairment-related work expenses. If you are an em-
2. You are a fee-basis state or local government official ployee, you enter impairment-related work expenses on
claiming expenses in performing that job. Form 2106 or Form 2106-EZ. Enter on Schedule A (Form

Publication 529 (2016) Page 17


1040), line 28, or Schedule A (Form 1040NR), line 14, that forms, or instructions, go to IRS.gov and find resources
part of the amount on Form 2106, line 10, or Form that can help you right away.
2106-EZ, line 6, that is related to your impairment. Enter
the amount that is unrelated to your impairment on Sched- Preparing and filing your tax return. Find free options
ule A (Form 1040), line 21, or Schedule A (Form 1040NR), to prepare and file your return on IRS.gov or in your local
line 7. community if you qualify.
If you are self-employed, enter your impairment-related The Volunteer Income Tax Assistance (VITA) program
work expenses on the appropriate Form (Schedule C, offers free tax help to people who generally make $54,000
C-EZ, E, or F) used to report your business income and or less, persons with disabilities, the elderly, and limi-
expenses. ted-English-speaking taxpayers who need help preparing
their own tax returns. The Tax Counseling for the Elderly
Tax preparation fees. Deduct expenses of preparing tax (TCE) program offers free tax help for all taxpayers, par-
schedules relating to profit or loss from business (Sched- ticularly those who are 60 years of age and older. TCE
ule C or C-EZ), rentals or royalties (Schedule E), or farm volunteers specialize in answering questions about pen-
income and expenses (Schedule F) on the appropriate sions and retirement-related issues unique to seniors.
schedule. Deduct expenses of preparing the remainder of You can go to IRS.gov and click on the Filing tab to see
the return on Schedule A (Form 1040), line 22, or Form your options for preparing and filing your return which in-
1040NR, Schedule A, line 8. clude the following.
Free File. Go to IRS.gov/freefile. See if you qualify to
Example use brand-name software to prepare and efile your
federal tax return for free.
Debra Smith is employed as a salesperson. She isn't a
statutory employee. Her adjusted gross income is VITA. Go to IRS.gov/vita, download the free IRS2Go
$40,000, and she didn't receive any reimbursement for app, or call 1-800-906-9887 to find the nearest VITA
her expenses. She has the following qualifying miscella- location for free tax preparation.
neous deductions: TCE. Go to IRS.gov/tce, download the free IRS2Go
app, or call 1-888-227-7669 to find the nearest TCE
Entertainment expenses . . . . . . . . . . . . . . . . . $ 500 location for free tax preparation.
Transportation expenses . . . . . . . . . . . . . . . . . 500
Home office expenses . . . . . . . . . . . . . . . . . . 1,100 Getting answers to your tax law questions.
Tax return preparation . . . . . . . . . . . . . . . . . . 200 On IRS.gov get answers to your tax questions
Investment counseling . . . . . . . . . . . . . . . . . . 300
anytime, anywhere.
Gambling losses (reported $200 as income) . . . . 200
Go to IRS.gov/help or IRS.gov/letushelp pages for a
Of Debra's deductions, only gambling losses aren't variety of tools that will help you get answers to some
subject to the 2%-of-adjusted-gross-income limit. She en- of the most common tax questions.
ters the gambling losses on Schedule A, line 28. The
other items are subject to the 2% limit and are shown on Go to IRS.gov/ita for the Interactive Tax Assistant, a
Schedule A, lines 21, 22, and 23. tool that will ask you questions on a number of tax law
topics and provide answers. You can print the entire
Debra completes Form 2106-EZ, Part I. She enters the interview and the final response for your records.
transportation expenses of $500 on line 2. The home of-
Go to IRS.gov/pub17 to get Pub. 17, Your Federal In-
fice expenses of $1,100 are entered on line 4. The enter-
come Tax for Individuals, which features details on
tainment expenses of $500 are subject to the 50% limit
tax-saving opportunities, 2016 tax changes, and thou-
and are entered on line 5. She then completes the rest of
sands of interactive links to help you find answers to
the form. The total expenses of $1,850, shown on line 6,
your questions. View it online in HTML or as a PDF or,
are entered on Schedule A, line 21.
better yet, download it to your mobile device to enjoy
Debra's expenses for tax return preparation are en- eBook features.
tered on Schedule A, line 22. Her expenses for invest- You may also be able to access tax law information in
ment counseling are entered on line 23. She then totals your electronic filing software.
the amounts on lines 21, 22, and 23 and enters this total
of $2,350 on line 24. She enters $40,000, her adjusted
gross income, on line 25. She multiplies this amount by Getting tax forms and publications. Go to IRS.gov/
2% (.02) and enters the result of $800 on line 26. She sub- forms to view, download, or print all of the forms and pub-
tracts the amount on line 26 from the amount on line 24 lications you may need. You can also download and view
and enters $1,550, her allowable deduction, on line 27. popular tax publications and instructions (including the
1040 instructions) on mobile devices as an eBook at no
charge. Or, you can go to IRS.gov/orderforms to place an
How To Get Tax Help order and have forms mailed to you within 10 business
days.
If you have questions about a tax issue, need help prepar-
ing your tax return, or want to download free publications,

Page 18 Publication 529 (2016)


Using direct deposit. The fastest way to receive a tax EIC or the ACTC. This applies to the entire refund, not
refund is to combine direct deposit and IRS efile. Direct just the portion associated with these credits.
deposit securely and electronically transfers your refund
Download the official IRS2Go app to your mobile de-
directly into your financial account. Eight in 10 taxpayers
vice to check your refund status.
use direct deposit to receive their refund. IRS issues more
than 90% of refunds in less than 21 days. Call the automated refund hotline at 1-800-829-1954.

Delayed refund for returns claiming certain credits. Making a tax payment. The IRS uses the latest encryp-
Due to changes in the law, the IRS cant issue refunds be- tion technology to ensure your electronic payments are
fore February 15, 2017, for returns that claim the earned safe and secure. You can make electronic payments on-
income credit (EIC) or the additional child tax credit line, by phone, and from a mobile device using the
(ACTC). This applies to the entire refund, not just the por- IRS2Go app. Paying electronically is quick, easy, and
tion associated with these credits. faster than mailing in a check or money order. Go to
IRS.gov/payments to make a payment using any of the
Getting a transcript or copy of a return. The quickest following options.
way to get a copy of your tax transcript is to go to IRS.gov/
IRS Direct Pay: Pay your individual tax bill or estima-
transcripts. Click on either "Get Transcript Online" or "Get
ted tax payment directly from your checking or sav-
Transcript by Mail" to order a copy of your transcript. If
ings account at no cost to you.
you prefer, you can:
Debit or credit card: Choose an approved payment
Order your transcript by calling 1-800-908-9946.
processor to pay online, by phone, and by mobile de-
Mail Form 4506-T or Form 4506T-EZ (both available vice.
on IRS.gov).
Electronic Funds Withdrawal: Offered only when fil-
Using online tools to help prepare your return. Go to ing your federal taxes using tax preparation software
IRS.gov/tools for the following. or through a tax professional.
The Earned Income Tax Credit Assistant (IRS.gov/eic) Electronic Federal Tax Payment System: Best op-
determines if you are eligible for the EIC. tion for businesses. Enrollment is required.
The Online EIN Application (IRS.gov/ein) helps you Check or money order: Mail your payment to the ad-
get an employer identification number. dress listed on the notice or instructions.
The IRS Withholding Calculator (IRS.gov/w4app) esti- Cash: If cash is your only option, you may be able to
mates the amount you should have withheld from your pay your taxes at a participating retail store.
paycheck for federal income tax purposes.
What if I cant pay now? Go to IRS.gov/payments for
The First Time Homebuyer Credit Account Lookup more information about your options.
(IRS.gov/homebuyer) tool provides information on
Apply for an online payment agreement (IRS.gov/opa)
your repayments and account balance.
to meet your tax obligation in monthly installments if
The Sales Tax Deduction Calculator (IRS.gov/ you cant pay your taxes in full today. Once you com-
salestax) figures the amount you can claim if you item- plete the online process, you will receive immediate
ize deductions on Schedule A (Form 1040), choose notification of whether your agreement has been ap-
not to claim state and local income taxes, and you proved.
didnt save your receipts showing the sales tax you
Use the Offer in Compromise PreQualifier (IRS.gov/
paid.
oic) to see if you can settle your tax debt for less than
Resolving tax-related identity theft issues. the full amount you owe.
The IRS doesnt initiate contact with taxpayers by Checking the status of an amended return. Go to
email or telephone to request personal or financial in- IRS.gov and click on Wheres My Amended Return?
formation. This includes any type of electronic com- (IRS.gov/wmar) under the Tools bar to track the status of
munication, such as text messages and social media Form 1040X amended returns. Please note that it can
channels. take up to 3 weeks from the date you mailed your amen-
Go to IRS.gov/idprotection for information and videos. ded return for it show up in our system and processing it
can take up to 16 weeks.
If your SSN has been lost or stolen or you suspect you
are a victim of tax-related identity theft, visit IRS.gov/id Understanding an IRS notice or letter. Go to IRS.gov/
to learn what steps you should take. notices to find additional information about responding to
an IRS notice or letter.
Checking on the status of your refund.
Contacting your local IRS office. Keep in mind, many
Go to IRS.gov/refunds.
questions can be resolved on IRS.gov without visiting an
Due to changes in the law, the IRS cant issue refunds IRS Tax Assistance Center (TAC). Go to IRS.gov/
before February 15, 2017, for returns that claim the letushelp for the topics people ask about most. If you still

Publication 529 (2016) Page 19


need help, IRS TACs provide tax help when a tax issue work with you throughout the process and will do every-
cant be handled online or by phone. All TACs now pro- thing possible to resolve your issue. TAS can help you if:
vide service by appointment so youll know in advance
Your problem is causing financial difficulty for you,
that you can get the service you need without waiting. Be-
your family, or your business,
fore you visit, go to IRS.gov/taclocator to find the nearest
TAC, check hours, available services, and appointment You face (or your business is facing) an immediate
options. Or, on the IRS2Go app, under the Stay Connec- threat of adverse action, or
ted tab, choose the Contact Us option and click on Local Youve tried repeatedly to contact the IRS but no one
Offices. has responded, or the IRS hasnt responded by the
date promised.
Watching IRS videos. The IRS Video portal
(IRSvideos.gov) contains video and audio presentations
for individuals, small businesses, and tax professionals. How Can You Reach Us?

Getting tax information in other languages. For tax- We have offices in every state, the District of Columbia,
payers whose native language isnt English, we have the and Puerto Rico. Your local advocates number is in your
following resources available. Taxpayers can find informa- local directory and at taxpayeradvocate.irs.gov. You can
tion on IRS.gov in the following languages. also call us at 1-877-777-4778.
Spanish (IRS.gov/spanish).
How Can You Learn About Your Taxpayer
Chinese (IRS.gov/chinese). Rights?
Vietnamese (IRS.gov/vietnamese).
The Taxpayer Bill of Rights describes 10 basic rights that
Korean (IRS.gov/korean). all taxpayers have when dealing with the IRS. Our Tax
Russian (IRS.gov/russian). Toolkit at taxpayeradvocate.irs.gov can help you under-
stand what these rights mean to you and how they apply.
The IRS TACs provide over-the-phone interpreter serv-
These are your rights. Know them. Use them.
ice in over 170 languages, and the service is available
free to taxpayers.
How Else Does the Taxpayer Advocate
The Taxpayer Advocate Service Is Service Help Taxpayers?
Here To Help You TAS works to resolve large-scale problems that affect
many taxpayers. If you know of one of these broad issues,
What is the Taxpayer Advocate Service? please report it to us at IRS.gov/sams.
The Taxpayer Advocate Service (TAS) is an independ-
ent organization within the IRS that helps taxpayers and Low Income Taxpayer Clinics
protects taxpayer rights. Our job is to ensure that every
taxpayer is treated fairly and that you know and under- Low Income Taxpayer Clinics (LITCs) serve individuals
stand your rights under the Taxpayer Bill of Rights. whose income is below a certain level and need to resolve
tax problems such as audits, appeals, and tax collection
disputes. Some clinics can provide information about tax-
What Can the Taxpayer Advocate Service
payer rights and responsibilities in different languages for
Do For You? individuals who speak English as a second language. To
We can help you resolve problems that you cant resolve find a clinic near you, visit IRS.gov/litc or see IRS Publica-
with the IRS. And our service is free. If you qualify for our tion 4134, Low Income Taxpayer Clinic List.
assistance, you will be assigned to one advocate who will

Page 20 Publication 529 (2016)


To help us develop a more useful index, please let us know if you have ideas for index entries.
Index See Comments and Suggestions in the Introduction for the ways you can reach us.

Dues 4 Fines 15
(See also Fees) Form 2106:
A (See also Expenses) Employee business expenses 17
Activities not for profit 10 Chambers of Commerce 4 Form 2106-EZ:
Adjustments to gross income: Club 15 Employee business expenses 17
Armed forces reservists' travel Lobbying 15 Form 4562:
expenses 6 Professional societies 4 Depreciation and amortization 4, 17
Performing artists 13 Union 7 Funeral expenses 14
State or local government officials paid on
fee basis 13
Unlawful discrimination claims 10
Administrative fees: E G
IRA trustees 11 Education 4, 8 Gambling winnings and losses 12
Adoption expenses 14 Education expenses 8 Government employees:
Amortizable bond premium 12 Employee business expenses: Federal criminal investigation and
Appraisal fees 9 Form 2106 and Form 2106-EZ 17 prosecution travel expenses 6
Armed forces: Performing artists 13 State or local government officials paid on
Military uniforms 8 Unreimbursed 2 fee basis 13
Reservists, travel expenses 6 Employment:
Assistance (See Tax help) Agency fees 5
Breach of contract 3
Entertainers and H
musicians (See Performing artists) Health spa 15
B Entertainment expenses 7 Hobbies 10
Bad debts 3 Estates: Home:
Bank accounts: Federal estate tax 12 Security system 15
Check-writing fees 15 Expenses 4, 8 Telephone service 16
Losses on deposits 10 (See also Dues) Home office:
Bonds: (See also Fees) Computers 17
Amortizable premium 12 Adoption 14 Expenses 5
Breach of contract: Campaign 14 Principal place of business 5
Damages 3 Capital 14 Travel and transportation expenses 7
Bribes 14 Commuting 15
Burial expenses 14 Education:
Business expenses (See Employee
business expenses)
Work-related 8
Educator:
I
Business gifts 7 Qualified 1, 4 Identity theft 19
Educator Expenses 4 Impairment-related work expenses 13
Employee business (See Employee Income aid payment 6
business expenses) Income in respect of decedent:
C Entertainment 7 Estate tax 12
Campaign contributions 4, 16 Funeral and burial 14 Individual retirement arrangements
Campaign expenses 14 Gifts 6, 7 (IRAs):
Capital expenditures 14 Health spa 15 Trustees' fees 11
Casualty losses 9, 12 Hobby 10 Insurance:
Cell phones 3 Home office 5 Business liability 3
Chambers of Commerce dues 4 Impairment-related 13 Life insurance 15
Check-writing fees 15 Investment 10, 15 Malpractice 3
Claim of right repayments 14 Job search 5 Personal disability 14
Clerical help, deductibility of 9 Legal (See Legal expenses) Interest income:
Clothes: Local lodging 6 Fees to collect 9
Protective 8 Meals 7, 16 Investments:
Work 7 Meals and entertainment 6 Annuity, unrecovered investment in 14
Club dues 15 Nondeductible 14 Deposits, losses on 10
Commissions 14 Over limit, educator 5 Fees and expenses 10
Commuting expenses 15 Personal 14 Seminars 15
Computers: Production of income 8 Itemized deductions:
Depreciation 3, 9 Professional promotion 16 Deductions not subject to 2% limit 11
Convenience fees 9 Tax-exempt income 16 Deductions subject to 2% limit 2
Criminal prosecutions: Travel and transportation 6 How to report 17
Travel expenses for federal staff 6 Travel as education 8

J
D F Job search 5
Damages: Federal estate tax 12
Breach of employment contract 3 Fees 4
Deposits:
Losses on 10
(See also Dues) K
(See also Expenses) Kickbacks 14
Depreciation: Appraisal 9
Computers 3, 9 Check-writing 15
Disabilities, persons with: Employment and outplacement agency 5
Work-related expenses 13 Investment 9, 10 L
Dividends: IRA trustee 11 Legal expenses:
Fees to collect 9 Legal (See Legal expenses) Job-related 5
Service charges on reinvestment License 5 Personal 16
plans 11 Professional accreditation 16 Political campaigns 14

Publication 529 (2016) Page 21


Production of income 10 Political contributions 4, 16 State or local governments:
Unlawful discrimination claims 10 Campaign expenses 14 Officials paid on fee basis 13
Licenses: Ponzi-type investment schemes 13 Stockholders' meeting expenses 16
Fees 5 Postal workers 6
Life insurance 15 Production of income expenses 811
Lobbying 4, 15, 16 Professional accreditation fees 16
Local transportation 6 Professional journals 3 T
Losses: Professional reputation and Taxes:
Casualties and thefts 9, 12 marketing 16 Estate tax 12
Deposits 10 Professional societies dues 4 Occupational 5
Gambling 12 Prosecution travel expenses 6 Tax-exempt income expenses 16
IRA 11 Protective clothing 8 Tax help 18
Mislaid cash or property 16 Publications (See Tax help) Telephones:
Partnership 13 Cell phone 3
Roth IRA 11 Residential service 16
Theft losses 9, 12
R Tools 6
Recordkeeping requirements: Travel and transportation expenses 7
M Computer used for home and business 4 Another individual, paid by taxpayer 17
Mail carriers, rural 6 Deductions, to verify 2 Armed forces reservists 6
Malpractice insurance 3 Gambling winnings and losses 12 Commuting 15
Meal and lodging expenses 7 Home office 5 Criminal investigations and
Lunches with coworkers 16 Relief fund contributions 16 prosecutions 6
Working late 16 Rent: Education 8
Medical examinations 3 Office 9 Indefinite work assignments 6
Mileage rate 1 Safe deposit box 11 Job search 5
Missing children, photographs of 1 Repayments: Local transportation 6
Mutual funds: Claim of right 14 Research 6
Indirect deductions 10 Income 11 Temporary work assignments 6
Income aid payments 3 Trustees:
Social Security benefits 11 IRA administrative fees 11
Reporting requirements:
N Armed Forces reservists 17
Nondeductible expenses 1417 Computer used in a home office 17
Not-for-profit activities 10 Depreciation 17 U
Form 2106 and Form 2106-EZ 17 Unemployment and education
Impairment-related work expenses 17 expenses 8
Unemployment benefit fund
O Itemized deductions 17
Tax preparation fees 18 contributions 17
Occupational taxes 5 Research expenses 6 Uniforms, military 8
Office: Rsum 5 Union dues 7
Home (See Home office) Rural mail carriers 6 Unreimbursed employee expenses 28
Rent 9
Outplacement agency fees 5

S W
Wagering winnings and losses 12
P Safe deposit box 11
S corporations: Work:
Partnerships: Indirect deductions 10 Clothes and uniforms 7
Indirect deductions 10 Security systems, home 15 Impairment-related expenses 13
Passport expense 3 Seminars, investment-related 15 Supplies 3
Pass-through entities 10 Service charges on dividend Tools 3, 6
Penalties 15 reinvestment plans 11 Travel and transportation expenses 6
Performing artists 13 Social Security repayments 11 Wristwatches 14, 17
Work clothes 8
Personal expenses 14, 17

Page 22 Publication 529 (2016)