Quote:
Originally Posted by suzzer99
So are you saying it is a max of 2% of gross income? So our hypothetical trucker's gross income would have to be $1.5M for him to not be able to write off the $30k?
I’m not sure if I’m reading your question properly so let me just quick explain it. A 2% itemized deduction works as such:
Adjusted Gross Income (AGI) x .02 = 2% threshold. If your AGI is 1,500,000 then the sum of all your 2% Itemized Deductions must exceed 30,000 for them to start being deductible. Anything over the 30,000 is deductible and anything less is not. If in total it was 31,000 then he would get a 1,000 deduction. If the trucker receives 1099-MISCs instead of a W-2 they’d report this on Schedule C or relevant business return and there is no such limitation for these business expenses.
2% itemized deductions include:
-Unreimbursed employee business expenses (mileage, tools, uniforms, etc)
-Tax prep fees
-Investment expenses
-Union dues
-Professional Certification fees/licenses
This no longer exists as an itemized deduction for federal tax purposes. States probably still allow it if they did not conform.