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Department of the Treasury Contents Internal Revenue Service Reminders ...... 1 Publication 529 Introduction ...... 1 (Rev. December 2020) Deductions for Unreimbursed Employee Cat. No. 15056O Expenses ...... 2 Unreimbursed Employee Expenses ...... 2

Expenses You Can’t Deduct ...... 3 Miscellaneous Miscellaneous Deductions Subject to the 2% AGI Limit ...... 4 Deductions Nondeductible Expenses ...... 6 Expenses You Can Deduct ...... 9

How To Report ...... 11 Example ...... 12

How To Get Tax Help ...... 12

Index ...... 17

Reminders Future developments. For the latest information about developments related to Pub. 529, such as legislation enacted after it was published, go to IRS.gov/Pub529. Photographs of missing children. The IRS is a proud partner with the National Center for Missing & Exploited Children® (NCMEC). Photographs of missing children se- lected by the Center may appear in this publication on pa- ges 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 recog- nize a child.

Introduction This publication explains that you can no longer claim any miscellaneous itemized deductions, unless you fall into one of the qualified categories of employment claiming a deduction relating to unreimbursed employee expenses. Miscellaneous itemized deductions are those deductions that would have been subject to the 2%-of-adjus- ted-gross-income (AGI) limitation. You can still claim cer- tain expenses as itemized deductions on Schedule A (Form 1040), Schedule A (1040-NR), or as an adjustment to income on Form 1040 or 1040-SR. This publication covers the following topics. • Deductions for Unreimbursed Employee Expenses. Get forms and other information faster and easier at: • Expenses you can't deduct. • IRS.gov (English) • IRS.gov/Korean (한국어) • IRS.gov/Spanish (Español) • IRS.gov/Russian (Pусский) • Expenses you can deduct. • IRS.gov/Chinese (中文) • IRS.gov/Vietnamese (TiếngViệt) • How to report your deductions. Note. Generally, nonresident aliens who fall into one of the qualified categories of employment are allowed de- ductions to the extent they are directly related to income

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which is effectively connected with the conduct of a trade or business within the United States. Deductions for Unreimbursed You must keep records to verify your deductions. You should keep receipts, canceled checks, sub- Employee Expenses RECORDS stitute checks, financial account statements, and other documentary evidence. You can no longer claim any miscellaneous itemized de- ductions that are subject to the 2%-of-AGI limitation, in- Comments and suggestions. We welcome your com- cluding unreimbursed employee expenses. However, you ments about this publication and suggestions for future may be able to deduct certain unreimbursed employee editions. business expenses if you fall into one of the following cat- You can send us comments through IRS.gov/ egories of employment listed under Unreimbursed Em- FormComments. Or, you can write to the Internal Reve- ployee Expenses next, or are an eligible educator as de- nue Service, Tax Forms and Publications, 1111 Constitu- fined under Educator Expenses, later. tion Ave. NW, IR-6526, Washington, DC 20224. Although we can’t respond individually to each com- Unreimbursed Employee Expenses ment received, we do appreciate your feedback and will consider your comments and suggestions as we revise You can no longer claim a deduction for unreimbursed our tax forms, instructions, and publications. Do not send employee expenses unless you fall into one of the follow- tax questions, tax returns, or payments to the above ad- ing categories of employment, or have certain qualified dress. educator expenses. Getting answers to your tax questions. If you have • Armed Forces reservists. a tax question not answered by this publication or the How • Qualified performing artists. To Get Tax Help section at the end of this publication, go to the IRS Interactive Tax Assistant page at IRS.gov/ • Fee-basis state or local government officials. Help/ITA where you can find topics by using the search • Employees with impairment-related work expenses. feature or viewing the categories listed. Unreimbursed employee expenses for individuals in Getting tax forms, instructions, and publications. these categories of employment are deducted as adjust- Visit IRS.gov/Forms to download current and prior-year ments to gross income. Qualified employees listed in one forms, instructions, and publications. of the categories above must complete Form 2106 to take Ordering tax forms, instructions, and publications. the deduction. Certain qualified educator expenses are Go to IRS.gov/OrderForms to order current forms, instruc- also deducted as an adjustment to gross income but you tions, and publications; call 800-829-3676 to order are not required to complete Form 2106. prior-year forms and instructions. The IRS will process You can deduct only unreimbursed employee expen- your order for forms and publications as soon as possible. ses that are paid or incurred during your tax year, for car- Do not resubmit requests you’ve already sent us. You can rying on your trade or business of being an employee, and get forms and publications faster online. ordinary and necessary. Useful Items An expense is ordinary if it is common and accepted in You may want to see: your trade, business, or profession. An expense is neces- sary if it is appropriate and helpful to your business. An Publication expense doesn't have to be required to be considered necessary.

463 463 Travel, Gift, and Car Expenses

525 525 Taxable and Nontaxable Income Categories of Employment

535 535 Business Expenses You can deduct unreimbursed employee expenses only if you qualify as an Armed Forces reservist, a qualified per-

587 587 Business Use of Your Home (Including Use by forming artist, a fee-basis state or local government offi- Daycare Providers) cial, or an employee with impairment-related work expen-

946 946 How To Depreciate Property ses.

Form (and Instructions) Armed Forces reservist (member of a reserve com- ponent). You are a member of a reserve component of Schedule A (Form 1040) Schedule A (Form 1040) Itemized Deductions the Armed Forces of the United States if you are in the Army, Navy, Marine Corps, Air Force, or Coast Guard Re- Schedule A (Form 1040-NR) Schedule A (Form 1040-NR) Itemized Deductions serve; the Army National Guard of the United States; or

2106 2106 Employee Business Expenses the Reserve Corps of the Public Health Service. See How To Get Tax Help at the end of this publication for Armed Forces reservists traveling more than 100 information about getting these publications and forms. miles from home. If you are a member of a reserve

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component of the Armed Forces of the United States and with your place of work that are necessary for you to be you travel more than 100 miles away from home in con- able to work. nection with your performance of services as a member of the reserves, you can deduct some of your travel expen- Educator Expenses ses as an adjustment to gross income. The amount of ex- penses you can deduct as an adjustment to gross income If you were an eligible educator for the tax year, you may is limited to the regular federal per diem rate (for lodging, be able to deduct qualified expenses you paid as an ad- meals, and incidental expenses) and the standard mile- justment to gross income on your Schedule 1 (Form age rate (for car expenses) plus any parking fees, ferry 1040), rather than as a miscellaneous itemized deduction. fees, and tolls. The balance, if any, is reported on Sched- See the Instructions for Forms 1040 and 1040-SR for ule A. more information. For more information on travel expenses, see Pub. 463. Eligible educator. An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, Qualified performing artist. You are a qualified per- or aide in school for at least 900 hours during a school forming artist if you: year. 1. Performed services in the performing arts as an em- Qualified expenses. Qualified expenses include ordi- ployee for at least two employers during the tax year, nary and necessary expenses paid in connection with 2. Received from at least two of the employers wages of books, supplies, equipment (including computer equip- $200 or more per employer, ment, software, and services), and other materials used in the classroom. An ordinary expense is one that is com- 3. Had allowable business expenses attributable to the mon and accepted in your educational field. A necessary performing arts of more than 10% of gross income expense is one that is helpful and appropriate for your from the performing arts, and profession as an educator. An expense doesn’t have to be 4. Had adjusted gross income of $16,000 or less before required to be considered necessary. deducting expenses as a performing artist. Qualified expenses also include those expenses you incur while participating in professional development cour- If you are a qualified performing artist, you can deduct ses related to the curriculum in which you provide instruc- your employee business expenses as an adjustment to in- tion. It also includes those expenses related to those stu- come rather than as a miscellaneous itemized deduction. dents for whom you provide that instruction. For example, musicians and entertainers can deduct the Qualified expenses don’t include expenses for home cost of theatrical clothing and accessories that aren't suit- schooling or for nonathletic supplies for courses in health able for everyday wear. If you are an employee, complete or physical education. You must reduce your qualified ex- Form 2106. See Pub. 463 for more information. penses by the following amounts. Fee-basis state or local government official. You are • Excludable U.S. series EE and I savings bond interest a qualifying fee-basis official if you are employed by a from Form 8815. state or political subdivision of a state and are compensa- • Nontaxable qualified state tuition program earnings. ted, in whole or in part, on a fee basis. If you are a fee-basis official, you can claim your expen- • Nontaxable earnings from Coverdell education sav- ses in performing services in that job as an adjustment to ings accounts. income rather than as a miscellaneous itemized deduc- • Any reimbursements you received for those expenses tion. See Pub. 463 for more information. that weren’t reported to you on your Form W-2, box 1. Employee with impairment-related work expenses. Impairment-related work expenses are the allowable ex- penses of an individual with physical or mental disabilities Expenses You Can’t Deduct for attendant care at his or her place of employment. They also include other expenses in connection with the place In addition to the expenses that are no longer deductible of employment that enable the employee to work. See as a miscellaneous itemized deduction, there are expen- Pub. 463 for more details. ses that are traditionally nondeductible under the Internal If you have a physical or mental disability that limits Revenue Code. Both categories of deduction are dis- your being employed, or substantially limits one or more of cussed next. your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, and work- ing, you can deduct your impairment-related work expen- ses. Impairment-related work expenses are ordinary and necessary business expenses for attendant care services at your place of work and other expenses in connection

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Miscellaneous Deductions Subject to income on those investments are miscellaneous itemized the 2% AGI Limit deductions and are no longer deductible. Credit or Debit Card Convenience Fees Unless you qualify for an exception, you generally can't deduct the following expenses, even if you fall into one of The convenience fee charged by the card processor for the qualified categories of employment listed earlier. paying your income tax (including estimated tax pay- • Appraisal fees for a casualty loss or charitable contri- ments) by credit or debit card is a miscellaneous itemized bution. deduction and is no longer deductible. • Casualty and theft losses from property used in per- forming services as an employee. Depreciation on Home Computer • Clerical help and office rent in caring for investments. If you use your home computer to produce income (for ex- ample, to manage your investments that produce taxable • Credit or debit card convenience fees. income), the depreciation of the computer for that part of • Depreciation on home computers used for invest- the usage of the computer is a miscellaneous itemized de- ments. duction and is no longer deductible. • Fees to collect interest and dividends. Fees To Collect Interest and Dividends • Hobby expenses, but generally not more than hobby income. Fees you pay to a broker, bank, trustee, or similar agent to • Indirect miscellaneous deductions from pass-through collect your taxable bond interest or dividends on shares entities. of stock are miscellaneous itemized deductions and can no longer be deducted. • Investment fees and expenses. • Legal fees related to producing or collecting taxable Fines or Penalties income or getting tax advice. No deduction is allowed for fines and penalties paid to a • Loss on deposits in an insolvent or bankrupt financial government or specified nongovernmental entity for the vi- institution. olation of any law except in the following situations. • Loss on traditional IRAs or Roth IRAs, when all • Certain amounts that constitute restitution. amounts have been distributed to you. • Certain amounts paid to come into compliance with • Repayments of income. the law. • Repayments of social security benefits. • Amounts paid or incurred as the result of certain court • Safe deposit box rental, except for storing jewelry and orders in which no government or specified nongo- other personal effects. vernmental agency is a party. • Service charges on dividend reinvestment plans. • Amounts paid or incurred for taxes due. • Tax advice fees. Nondeductible amounts include an amount paid in set- • Trustee's fees for your IRA, if separately billed and tlement of your actual or potential liability for a fine or pen- paid. alty (civil or criminal). Fines or penalties include amounts paid such as parking tickets, tax penalties, and penalties Appraisal Fees deducted from teachers' paychecks after an illegal strike. No deduction is allowed for the restitution amount or Appraisal fees you pay to figure a casualty loss or the fair amount paid to come into compliance with the law unless market value of donated property are miscellaneous item- the amounts are specifically identified in the settlement ized deductions and can no longer be deducted. agreement or court order. Also, any amount paid or incur- red as reimbursement to the government for the costs of Casualty and Theft Losses any investigation or litigation are nondeductible. Damaged or stolen property used in performing services Hobby Expenses as an employee is a miscellaneous deduction and can no longer be deducted. For more information on casualty and A hobby isn’t a business because it isn’t carried on to theft losses, see Pub. 547, Casualties, Disasters, and make a profit. If you receive income for an activity that you Thefts. don’t carry out to make a profit, the expenses you pay for the activity are miscellaneous itemized deductions and Clerical Help and Office Rent can no longer be deducted. See Not-for-Profit Activities in chapter 1 of Pub. 535. You must still report the income Office expenses, such as rent and clerical help, you pay in you receive on your Schedule 1 (Form 1040). connection with your investments and collecting taxable

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Indirect Deductions of Pass-Through loss as an ordinary loss or as a casualty loss on your Entities Schedule A (Form 1040). Pass-through entities include partnerships, S corpora- Loss on IRA tions, and mutual funds that aren't publicly offered. De- ductions of pass-through entities are passed through to A loss on your traditional IRA (or Roth IRA) investment is the partners or shareholders. The partner’s or sharehold- a miscellaneous itemized deduction and can no longer be er’s share of passed-through deductions for investment deducted. expenses are miscellaneous itemized deductions and can no longer be deducted. Repayments of Income

Nonpublicly offered mutual funds. These funds will Generally, repayments of amounts that you included in in- send you a Form 1099-DIV, or a substitute form, showing come in an earlier year is a miscellaneous itemized de- your share of gross income and investment expenses. duction and can no longer be deducted. If you had to re- The investment expenses reported on Form 1099-DIV are pay more than $3,000 that you included in your income in a miscellaneous itemized deduction and are no longer de- an earlier year, you may be able to deduct the amount. ductible. See Repayments Under Claim of Right, later.

Investment Fees and Expenses Repayments of Social Security Benefits

Investment fees, custodial fees, trust administration fees, If the total amount shown in box 5 of all of your Forms and other expenses you paid for managing your invest- SSA-1099 and RRB-1099 is a negative figure, you may be ments that produce taxable income are miscellaneous able to deduct part of this negative figure if the figure is itemized deductions and are no longer deductible. more than $3,000. If the figure is less than $3,000, it is a miscellaneous itemized deduction and can no longer be Legal Expenses deducted. See Pub. 915, Social Security and Equivalent Railroad Retirement Benefits, for additional information. Legal expenses that you incur in attempting to produce or collect taxable income or that you pay in connection with the determination, collection, or refund of any tax are mis- Safe Deposit Box Rent cellaneous itemized deductions and are no longer deduc- Rent you pay for a safe deposit box you use to store taxa- tible. ble income-producing stocks, bonds, or investment rela- You can deduct legal expenses that are related to ted papers is a miscellaneous itemized deduction and can TIP doing or keeping your job, such as those you paid no longer be deducted. You also can't deduct the rent if to defend yourself against criminal charges aris- you use the box for jewelry, other personal items, or ing out of your trade or business. tax-exempt securities.

You can deduct expenses of resolving tax issues relat- Service Charges on Dividend ing to profit or loss from business reported on Schedule C Reinvestment Plans (Form 1040), Profit or Loss From Business (Sole Proprie- torship), from rentals or royalties reported on Schedule E Service charges you pay as a subscriber in a dividend re- (Form 1040), Supplemental Income and Loss, or from investment plan are a miscellaneous itemized deduction farm income and expenses reported on Schedule F (Form and can no longer be deducted. These service charges 1040), Profit or Loss From Farming, on that schedule. Ex- include payments for: penses for resolving nonbusiness tax issues are miscella- • Holding shares acquired through a plan, neous itemized deductions and are no longer deductible. • Collecting and reinvesting cash dividends, and Loss on Deposits • Keeping individual records and providing detailed statements of accounts. A loss on deposits can occur when a bank, credit union, or other financial institution becomes insolvent or bankrupt. If Tax Preparation Fees you can reasonably estimate the amount of your loss on money you have on deposit in a financial institution that Tax preparation fees on the return for the year in which becomes insolvent or bankrupt, you can generally choose you pay them are a miscellaneous itemized deduction and to deduct it in the current year even though its exact can no longer be deducted. These fees include the cost of amount hasn't been finally determined. tax preparation software programs and tax publications. They also include any fee you paid for electronic filing of If none of the deposit is federally insured, you could de- your return. duct the loss as a nonbusiness bad debt. Report it on your Schedule D (Form 1040). You can no longer deduct the

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Trustee's Administrative Fees for IRA • Stockholders’ meeting attendance expenses. Tax-exempt income earning/collecting expenses. Trustee's administrative fees that are billed separately and • paid by you in connection with your IRA are a miscellane- • The value of wages never received or lost vacation ous itemized deduction and can no longer be deducted. time. • Travel expenses for another individual. Nondeductible Expenses • Voluntary unemployment benefit fund contributions. In addition to the miscellaneous itemized deductions dis- • Wristwatches. cussed earlier, you can't deduct the following expenses. Adoption Expenses List of Nondeductible Expenses You can't deduct the expenses of adopting a child but you • Adoption expenses. may be able to take a credit for those expenses. For de- • Broker's commissions. tails, see Form 8839, Qualified Adoption Expenses. • Burial or funeral expenses, including the cost of a Commissions cemetery lot. • Campaign expenses. Commissions paid on the purchase of securities aren't de- ductible, either as business or nonbusiness expenses. In- • Capital expenses. stead, these fees must be added to the taxpayer's cost of • Check-writing fees. the securities. Commissions paid on the sale are deducti- • Club dues. ble as business expenses only by dealers. • Commuting expenses. Campaign Expenses • Fees and licenses, such as car licenses, marriage li- censes, and dog tags. You can't deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to • Fines or penalties. the office. These include qualification and registration fees • Health spa expenses. for primary elections. • Hobby losses—but see Hobby Expenses, earlier. Legal fees. You can't deduct legal fees paid to defend • Home repairs, insurance, and rent. charges that arise from participation in a political cam- paign. • Home security system. • Illegal bribes and kickbacks—see Bribes and kick- Capital Expenses backs in chapter 11 of Pub. 535. You can't currently deduct amounts paid to buy property Investment-related seminars. • that has a useful life substantially beyond the tax year or • Life insurance premiums paid by the insured. amounts paid to increase the value or prolong the life of • Lobbying expenses. property. If you use such property in your work, you may be able to take a depreciation deduction. See Pub. 946. If • Losses from the sale of your home, furniture, personal the property is a car used in your work, also see Pub. 463. car, etc. • Lost or misplaced cash or property. Check-Writing Fees on Personal Account • Lunches with co-workers. If you have a personal checking account, you can't deduct • Meals while working late. fees charged by the bank for the privilege of writing checks, even if the account pays interest. • Medical expenses as business expenses other than medical examinations required by your employer. Club Dues • Personal disability insurance premiums. • Personal legal expenses. Generally, you can't deduct the cost of membership in any club organized for business, pleasure, recreation, or other • Personal, living, or family expenses. social purpose. This includes business, social, athletic, • Political contributions. luncheon, sporting, airline, hotel, golf, and country clubs. • Professional accreditation fees. You can't deduct dues paid to an organization if one of • Professional reputation improvement expenses. its main purposes is to: • Relief fund contributions. • Conduct entertainment activities for members or their guests, or • Residential telephone line.

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• Provide members or their guests with access to enter- Investment-Related Seminars tainment facilities. You can't deduct any expenses for attending a conven- Dues paid to airline, hotel, and luncheon clubs aren't tion, seminar, or similar meeting for investment purposes. deductible. Life Insurance Premiums

Commuting Expenses You can't deduct premiums you pay on your life insur- ance. You may be able to deduct, as alimony, premiums You can't deduct commuting expenses (the cost of trans- you pay on life insurance policies assigned to your former portation between your home and your main or regular spouse. See Pub. 504, Divorced or Separated Individuals, place of work). If you fall into one of the qualified catego- for information on alimony. ries of employment discussed under Unreimbursed Em- ployee Expenses, earlier, and you haul tools, instruments, Lobbying Expenses or other items in your car to and from work, you can de- duct only the additional cost of hauling the items, such as You generally can't deduct amounts paid or incurred for the rent on a trailer to carry the items. lobbying expenses. These include expenses to: Fines or Penalties 1. Influence legislation; 2. Participate, or intervene, in any political campaign for, No deduction is allowed for fines and penalties paid to a or against, any candidate for public office; government or specified nongovernmental entity for the vi- olation of any law except in the following situations. 3. Attempt to influence the general public, or segments of the public, about elections, legislative matters, or Certain amounts that constitute restitution. • referendums; or • Certain amounts paid to come into compliance with the law. 4. Communicate directly with covered executive branch officials in any attempt to influence the official actions • Amounts paid or incurred as the result of certain court or positions of those officials. orders in which no government or specified nongo- vernmental agency is a party. Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordina- Amounts paid or incurred for taxes due. • tion of any of these activities. Nondeductible amounts include an amount paid in set- Covered executive branch official. A covered execu- tlement of your actual or potential liability for a fine or pen- tive branch official, for the purpose of (4) above, is any of alty (civil or criminal). Fines or penalties include amounts the following officials. paid such as parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike. • The President.

No deduction is allowed for the restitution amount or • The Vice President. amount paid to come into compliance with the law unless • Any officer or employee of the White House Office of the amounts are specifically identified in the settlement the Executive Office of the President, and the two agreement or court order. Also, any amount paid or incur- most senior level officers of each of the other agen- red as reimbursement to the government for the costs of cies in the Executive Office. any investigation or litigation are nondeductible. • 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 Expenses You Can Deduct, later, and Pub. 587. • You can deduct in-house expenses for influencing legislation or communicating directly with a covered executive branch official if the expenses for the tax

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year aren't more than $2,000 (not counting overhead Professional Accreditation Fees expenses). You can't deduct professional accreditation fees such as If you are a professional lobbyist, you can deduct the • the following. expenses you incur in the trade or business of lobby- ing on behalf of another person. Payments by the • Accounting certificate fees paid for the initial right to other person to you for lobbying activities can't be de- practice accounting. ducted. • Bar exam fees and incidental expenses in securing in- itial admission to the bar. Lost or Mislaid Cash or Property • Medical and dental license fees paid to get initial li- You can't deduct a loss based on the mere disappearance censing. of money or property. However, an accidental loss or dis- appearance of property can qualify as a casualty if it re- Professional Reputation sults from an identifiable event that is sudden, unexpec- ted, or unusual. See Pub. 547. 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 for 50% of You can't deduct any charge (including taxes) for basic lo- the cost of the meals if you are traveling away from home. cal telephone service for the first telephone line to your See Pub. 463 for information on deductible expenses residence, even if it is used in a trade or business. while traveling away from home. Stockholders' Meetings Personal Legal Expenses You can't deduct transportation and other expenses you You can't deduct personal legal expenses such as those pay to attend stockholders' meetings of companies in for the following. which you own stock but have no other interest. You can't deduct these expenses even if you are attending the • Custody of children. meeting to get information that would be useful in making • Breach of promise to marry suit. further investments. • Civil or criminal charges resulting from a personal re- lationship. Tax-Exempt Income Expenses • Damages for personal injury (except certain whistle- You can't deduct expenses to produce tax-exempt in- blower claims and unlawful discrimination claims). For come. You can't deduct interest on a debt incurred or con- more information about unlawful discrimination claims, tinued to buy or carry tax-exempt securities. see Expenses You Can’t Deduct, 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- • Preparation of a will. penses based on the amount of each type of income to determine the amount that you can deduct. • Property claims or property settlement in a divorce.

You can't deduct these expenses even if a result of the Travel Expenses for Another Individual legal proceeding is the loss of income-producing property. You generally can't deduct travel expenses you pay or in- cur for a spouse, dependent, or other individual who ac- Political Contributions companies you (or your employee) on personal or busi- ness travel unless the spouse, dependent, or other You can't deduct contributions made to a political candi- individual is an employee of the taxpayer, the travel is for date, a campaign committee, or a newsletter fund. Adver- a bona fide business purpose, and such expenses would tisements in convention bulletins and admissions to din- otherwise be deductible by the spouse, dependent, or ners or programs that benefit a political party or political candidate aren't deductible.

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other individual. See Pub. 463 for more information on de- The amortization of the premium is generally an offset to ductible travel expenses. interest income on the bond rather than a separate deduc- tion item. Voluntary Unemployment Benefit Fund Contributions Pre-1998 election to amortize bond premium. Gener- ally, if you first elected to amortize bond premium before You can't deduct voluntary unemployment benefit fund 1998, the above treatment of the premium doesn't apply contributions you make to a union fund or a private fund. to bonds you acquired before 1988. However, you can deduct contributions as taxes if state Bonds acquired after October 22, 1986, and before law requires you to make them to a state unemployment 1988. The amortization of the premium on these bonds is fund that covers you for the loss of wages from unemploy- investment interest expense subject to the investment in- ment caused by business conditions. terest limit, unless you chose to treat it as an offset to in- terest income on the bond. Wristwatches Bonds acquired before October 23, 1986. The am- You can't deduct the cost of a wristwatch, even if there is ortization of the premium on these bonds is deducted as a job requirement that you know the correct time to prop- an itemized deduction on your Schedule A (Form 1040). erly perform your duties. Deduction for excess premium. On certain bonds (such as bonds that pay a variable rate of interest or that provide for an interest-free period), the amount of bond Expenses You Can Deduct premium allocable to a period may exceed the amount of stated interest allocable to the period. If this occurs, treat You can deduct the items listed below as itemized deduc- the excess as an itemized deduction on your Schedule A tions. Report these items on your Schedule A (Form (Form 1040). However, the amount deductible is limited to 1040), or your Schedule A (Form 1040-NR). the amount by which your total interest inclusions on the bond in prior periods exceed the total amount you treated List of Deductions as a bond premium deduction on the bond in prior peri- ods. • Amortizable premium on taxable bonds. If any of the excess bond premium can't be deducted because of the limit, this amount is carried forward to the • Casualty and theft losses from income-producing next period and is treated as bond premium allocable to property. that period. If there is a bond premium carryforward as of • Excess deductions (including administrative expen- the end of the accrual period in which the bond is sold, re- ses) allowed a beneficiary on termination of an estate tired, or otherwise disposed of, treat the carryforward as or trust. an itemized deduction on your Schedule A (Form 1040). • Federal estate tax on income in respect of a dece- Pre-1998 choice to amortize bond premium. If dent. ! you made the choice to amortize the premium on CAUTION taxable bonds before 1998, you can deduct the Fines or penalties. • bond premium amortization that is more than your interest • Gambling losses up to the amount of gambling win- income only for bonds acquired during 1998 and later nings. years. • Impairment-related work expenses of persons with disabilities. More information. For more information on bond pre- mium, see Bond Premium Amortization in chapter 3 of • Losses from Ponzi-type investment schemes. Pub. 550. • Repayments of more than $3,000 under a claim of right. Casualty and Theft Losses of • Unlawful discrimination claims. Income-Producing Property • Unrecovered investment in an annuity. You can deduct a casualty or theft loss as an itemized de- • An ordinary loss attributable to a contingent payment duction on your Schedule A (Form 1040), if the damaged debt instrument or an inflation-indexed debt instru- or stolen property was income-producing property (prop- ment (for example, a Treasury Inflation-Protected Se- erty held for investment, such as stocks, notes, bonds, curity). gold, silver, vacant lots, and works of art). First report the loss on Form 4684. You may also have to include the loss Amortizable Premium on Taxable Bonds on Form 4797, Sales of Business Property, if you are oth- erwise required to file that form. To figure your deduction, In general, if the amount you pay for a bond is greater than add all casualty or theft losses from this type of property its stated principal amount, the excess is bond premium. included on Form 4684, or Form 4797. For more informa- You can elect to amortize the premium on taxable bonds. tion on casualty and theft losses, see Pub. 547.

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Excess Deductions of an Estate or Trust wagers plus expenses incurred in connection with the conduct of the gambling activity, such as travel to and Generally, if an estate or trust has an excess deduction re- from a casino. You can't deduct gambling losses that are sulting from total deductions being greater than its gross more than your winnings. Generally, nonresident aliens income, in the estate’s or trust's last tax year, a beneficiary can't deduct gambling losses on your Schedule A (Form can deduct the excess deductions, depending on its char- 1040-NR). acter. The excess deductions retain their character as an You can't reduce your gambling winnings by your adjustment to arrive at adjusted gross income on Sched- gambling losses and report the difference. You ule 1 (Form 1040), as a non-miscellaneous itemized de- ! CAUTION must report the full amount of your winnings as in- duction reported on Schedule A (Form 1040), or as a mis- come and claim your losses (up to the amount of win- cellaneous itemized deduction. For more information on nings) as an itemized deduction. Therefore, your records excess deductions of an estate or trust, see the Instruc- should show your winnings separately from your losses. tions for Schedule K-1 (Form 1041) for a Beneficiary Filing Form 1040 or 1040-SR. Diary of winnings and losses. You must keep an accurate diary or similar record of your losses Federal Estate Tax on Income in Respect of RECORDS and winnings. a Decedent Your diary should contain at least the following informa- You can deduct the federal estate tax attributable to in- tion. come in respect of a decedent that you as a beneficiary include in your gross income. Income in respect of the de- • The date and type of your specific wager or wagering cedent is gross income that the decedent would have re- activity. ceived had death not occurred and that wasn't properly in- • The name and address or location of the gambling es- cludible in the decedent's final income tax return. See tablishment. Pub. 559 for information about figuring the amount of this deduction. • The names of other persons present with you at the gambling establishment. Fines or Penalties • The amount(s) you won or lost.

Generally, a deduction is allowed for fines and penalties Proof of winnings and losses. In addition to your diary, paid to a government or specified nongovernmental entity you should also have other documentation. You can gen- for the violation of any law in the following situations. erally prove your winnings and losses through Form W-2G, Certain Gambling Winnings; Form 5754, State- • Certain amounts that constitute restitution. ment by Person(s) Receiving Gambling Winnings; wager- • Certain amounts paid to come into compliance with ing tickets; canceled checks; substitute checks; credit re- the law. cords; bank withdrawals; and statements of actual winnings or payment slips provided to you by the gam- • Amounts paid or incurred as the result of certain court bling establishment. orders in which no government or specified nongo- For specific wagering transactions, you can use the fol- vernmental agency is a party. lowing items to support your winnings and losses. • Amounts paid or incurred for taxes due. These recordkeeping suggestions are intended Nondeductible amounts include an amount paid in set- as general guidelines to help you establish your tlement of your actual or potential liability for a fine or pen- winnings and losses. They aren't all-inclusive. alty (civil or criminal). Fines or penalties include amounts Your tax liability depends on your particular facts and cir- paid such as parking tickets, tax penalties, and penalties cumstances. deducted from teachers' paychecks after an illegal strike. Keno. Copies of the keno tickets you purchased that No deduction is allowed for the restitution amount or were validated by the gambling establishment, copies of amount paid to come into compliance with the law unless your casino credit records, and copies of your casino the amounts are specifically identified in the settlement check-cashing records. agreement or court order. Also, any amount paid or incur- Slot machines. A record of the machine number and red as reimbursement to the government for the costs of all winnings by date and time the machine was played. any investigation or litigation are nondeductible. Table games (twenty-one (blackjack), craps, Gambling Losses Up to the Amount of poker, baccarat, roulette, wheel of fortune, etc.). The number of the table at which you were playing. Casino Gambling Winnings credit card data indicating whether the credit was issued You must report the full amount of your gambling winnings in the pit or at the cashier's cage. for the year on your Schedule 1 (Form 1040). You deduct Bingo. A record of the number of games played, cost your gambling losses for the year on your Schedule A of tickets purchased, and amounts collected on winning (Form 1040). Gambling losses include the actual cost of

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tickets. Supplemental records include any receipts from and Pub. 547, Casualties, Disasters, and Thefts, for more the casino, parlor, etc. information. Racing (horse, harness, dog, etc.). A record of the races, amounts of wagers, amounts collected on winning Repayments Under Claim of Right tickets, and amounts lost on losing tickets. Supplemental If you had to repay more than $3,000 that you included in records include unredeemed tickets and payment records your income in an earlier year because at the time you from the racetrack. thought you had an unrestricted right to it, you may be Lotteries. A record of ticket purchases, dates, win- able to deduct the amount you repaid, or take a credit nings, and losses. Supplemental records include unre- against your tax. See Repayments in Pub. 525 for more deemed tickets, payment slips, and winnings statements. information.

Home Office Unlawful Discrimination Claims

If you use a part of your home regularly and exclusively to You may be able to deduct, as an adjustment to income conduct business, you may be able to deduct a part of the on your Schedule 1 (Form 1040), attorney fees and court operating expenses and depreciation of your home. costs for actions settled or decided after October 22, 2004, involving a claim of unlawful discrimination, a claim You can claim this deduction for the business use of a against the U.S. Government, or a claim made under sec- part of your home only if you use that part of your home tion 1862(b)(3)(A) of the Social Security Act. However, the regularly and exclusively: amount you can deduct on your Schedule 1 (Form 1040), • As your principal place of business for any trade or is limited to the amount of the judgment or settlement you business; are including in income for the tax year. See Pub. 525 for more information. • As a place to meet or deal with your patients, clients, or customers in the normal course of your trade or Unrecovered Investment in Annuity business; or • In the case of a separate structure not attached to A retiree who contributed to the cost of an annuity can ex- your home, in connection with your trade or business. clude from income a part of each payment received as a tax-free return of the retiree's investment. If the retiree Principal place of business. If you have more than one dies before the entire investment is recovered tax free, place of business, the business part of your home is your any unrecovered investment can be deducted on the retir- principal place of business if: ee's final income tax return. See Pub. 575, Pension and • You use it regularly and exclusively for administrative Annuity Income, for more information about the tax treat- or management activities of your trade or business, ment of pensions and annuities. and • You have no other fixed location where you conduct substantial administrative or management activities of How To Report your trade or business. Claim most deductions as an itemized deduction on your Otherwise, the location of your principal place of busi- Schedule A (Form 1040), or Schedule A (Form 1040-NR). ness generally depends on the relative importance of the However, see Schedule 1 (Form 1040), later. activities performed at each location and the time spent at each location. Reporting employee business expenses. As descri- bed earlier in Unreimbursed Employee Expenses, there You should keep records that will give the infor- are four categories of employees who can claim deduc- mation needed to figure the deduction according tions for unreimbursed employee expenses. RECORDS to these rules. Also keep canceled checks, sub- Employees in the following categories can claim their stitute checks, or account statements and receipts of the unreimbursed employee expenses. expenses paid to prove the deductions you claim. • Armed Forces reservists. More information. See Pub. 587 for more detailed infor- • Qualified performing artists. mation and a worksheet for figuring the deduction. • Fee-basis state or local government officials. Losses From Ponzi-Type Investment • Employees with impairment-related work expenses. Schemes Generally, nonresident aliens who fall into one of the qualified categories of employment are al- These losses are deductible as theft losses of in- ! CAUTION lowed deductions to the extent they are directly come-producing property on your tax return for the year related to income which is effectively connected with the the loss was discovered. You figure the deductible loss in conduct of a trade or business within the United States. Section B of Form 4684. See the Form 4684 instructions

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Form 2106. If you have deductible employee business Schedule 1 (Form 1040). However, certain other expen- expenses, you must usually file Form 2106. ses are deducted on Schedule A (Form 1040). You must file Form 2106 if any of the following applies to you. Educator expenses. Certain qualified expenses of eligi- ble educators can be deducted on your Schedule 1 (Form 1. You are a qualified performing artist claiming perform- 1040). ing-artist-related expenses. Unlawful discrimination claims. You can deduct cer- 2. You are a fee-basis state or local government official tain attorney fees and court costs for unlawful discrimina- claiming expenses in performing that job. tion claims, described earlier, on your Schedule 1 (Form 3. You are an individual with a disability and are claiming 1040). impairment-related work expenses. See Employees with impairment-related work expenses, later. Example 4. You have travel expenses as a member of the Armed Forces reserves that you can deduct as an adjust- Debra Smith is an army reservist stationed 110 miles from ment to gross income. her home. She makes this trip once each month. In addi- tion to her travel expenses, she pays for her own uniforms 5. You are claiming job-related vehicle, travel, transpor- and for the cost of cleaning those uniforms. tation, or non-entertainment meal expenses. See the Instructions for Form 2106 for more information. In addition to her employee business expenses as an army reservist, she has gambling losses from her trips to Depreciation. Use Form 4562, to claim the depreciation the casino and race track. She has gambling winnings of deduction for a computer you placed in service after 2018. $5,400 and gambling losses of $5,700. Complete Form 4562, if you are claiming a section 179 Debra completes Form 2106. She enters her transpor- deduction. tation expenses of $500 as a reservist and she enters the Don't use Form 4562 to claim the depreciation deduc- amount of her expenses for the purchase of uniforms and tion for a computer you placed in service before 2019 and their cleaning, $250. She then completes the form, enter- used only in your home office, unless you are otherwise ing the $750 as her total expenses. Only the transporta- required to file Form 4562. Instead, report the deprecia- tion expenses for travel as a reservist are deductible as an tion directly on the appropriate form. adjustment on her Schedule 1 (Form 1040). The $250 is a Employees with impairment-related work expenses. miscellaneous itemized deduction and is not deductible. Most of the categories of employees who are able to claim Debra claims her gambling losses that don’t exceed deductions for unreimbursed employees report these de- her gambling winnings as an itemized deduction. Debra ductions as an adjustment to income on Schedule 1 enters her allowable loss ($5,400) on her Schedule A (Form 1040), discussed next. However, employees with (Form 1040). impairment-related work expenses on Form 2106 report these expenses on Schedule A (Form 1040). Enter impairment-related work expenses on Form 2106. Enter on your Schedule A (Form 1040); or your How To Get Tax Help Schedule A (Form 1040-NR), that part of the amount on If you have questions about a tax issue, need help prepar- Form 2106, that is related to your impairment. Those em- ing your tax return, or want to download free publications, ployment-related expenses not related to your impairment forms, or instructions, go to IRS.gov and find resources are a miscellaneous itemized deduction and are no longer that can help you right away. deductible. If you are self-employed, enter your impairment-related Preparing and filing your tax return. After receiving all work expenses on the appropriate Form (Schedule C, E, your wage and earnings statements (Form W-2, W-2G, or F) used to report your business income and expenses. 1099-R, 1099-MISC, 1099-NEC, etc.); unemployment compensation statements (by mail or in a digital format) or Example. You are blind. You must use a reader to do other government payment statements (Form 1099-G); your work. You use the reader both during your regular and interest, dividend, and retirement statements from working hours at your place of work and outside your reg- banks and investment firms (Forms 1099), you have sev- ular working hours away from your place of work. The eral options to choose from to prepare and file your tax re- reader's services are only for your work. You can deduct turn. You can prepare the tax return yourself, see if you your expenses for the reader as impairment-related work qualify for free tax preparation, or hire a tax professional to expenses. prepare your return. Schedule 1 (Form 1040) Free options for tax preparation. Go to IRS.gov to see your options for preparing and filing your return online or Most deductible employee business expenses on Form 2106 are reported as an adjustment to income on your

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in your local community, if you qualify, which include the – Automatic calculation of taxable social security ben- following. efits. • Free File. This program lets you prepare and file your • The First Time Homebuyer Credit Account Look-up federal individual income tax return for free using (IRS.gov/HomeBuyer) tool provides information on brand-name tax-preparation-and-filing software or your repayments and account balance. Free File fillable forms. However, state tax preparation • The Sales Tax Deduction Calculator (IRS.gov/ may not be available through Free File. Go to IRS.gov/ SalesTax) figures the amount you can claim if you FreeFile to see if you qualify for free online federal tax itemize deductions on Schedule A (Form 1040). preparation, e-filing, and direct deposit or payment op- tions. Getting answers to your tax questions. On IRS.gov, you can get up-to-date information on • VITA. The Volunteer Income Tax Assistance (VITA) current events and changes in tax law. program offers free tax help to people with low-to-moderate incomes, persons with disabilities, • IRS.gov/Help: A variety of tools to help you get an- and limited-English-speaking taxpayers who need swers to some of the most common tax questions. help preparing their own tax returns. Go to IRS.gov/ • IRS.gov/ITA: The Interactive Tax Assistant, a tool that VITA, download the free IRS2Go app, or call will ask you questions on a number of tax law topics 800-906-9887 for information on free tax return prepa- and provide answers. ration. • IRS.gov/Forms: Find forms, instructions, and publica- • TCE. The Tax Counseling for the Elderly (TCE) pro- tions. You will find details on 2020 tax changes and gram offers free tax help for all taxpayers, particularly hundreds of interactive links to help you find answers those who are 60 years of age and older. TCE volun- to your questions. teers specialize in answering questions about pen- sions and retirement-related issues unique to seniors. • You may also be able to access tax law information in Go to IRS.gov/TCE, download the free IRS2Go app, your electronic filing software. or call 888-227-7669 for information on free tax return preparation. Need someone to prepare your tax return? There are • MilTax. Members of the U.S. Armed Forces and various types of tax return preparers, including tax prepar- qualified veterans may use MilTax, a free tax service ers, enrolled agents, certified public accountants (CPAs), offered by the Department of Defense through Military attorneys, and many others who don’t have professional OneSource. credentials. If you choose to have someone prepare your Also, the IRS offers Free Fillable Forms, which can tax return, choose that preparer wisely. A paid tax pre- be completed online and then filed electronically re- parer is: gardless of income. • Primarily responsible for the overall substantive accu- racy of your return, Using online tools to help prepare your return. Go to IRS.gov/Tools for the following. • Required to sign the return, and • The Earned Income Tax Credit Assistant (IRS.gov/ • Required to include their preparer tax identification EITCAssistant) determines if you’re eligible for the number (PTIN). earned income credit (EIC). Although the tax preparer always signs the return, • The Online EIN Application (IRS.gov/EIN) helps you you're ultimately responsible for providing all the informa- get an employer identification number (EIN). tion required for the preparer to accurately prepare your return. Anyone paid to prepare tax returns for others • The Tax Withholding Estimator (IRS.gov/W4app) should have a thorough understanding of tax matters. For makes it easier for everyone to pay the correct amount more information on how to choose a tax preparer, go to of tax during the year. The tool is a convenient, online Tips for Choosing a Tax Preparer on IRS.gov. way to check and tailor your withholding. It’s more user-friendly for taxpayers, including retirees and Coronavirus. Go to IRS.gov/Coronavirus for links to in- self-employed individuals. The features include the formation on the impact of the coronavirus, as well as tax following. relief available for individuals and families, small and large – Easy to understand language. businesses, and tax-exempt organizations. – The ability to switch between screens, correct pre- Tax reform. Tax reform legislation affects individuals, vious entries, and skip screens that don’t apply. businesses, and tax-exempt and government entities. Go – Tips and links to help you determine if you qualify to IRS.gov/TaxReform for information and updates on for tax credits and deductions. how this legislation affects your taxes. – A progress tracker. Employers can register to use Business Services On- – A self-employment tax feature. line. The Social Security Administration (SSA) offers on- line service at SSA.gov/employer for fast, free, and secure online W-2 filing options to CPAs, accountants, enrolled

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agents, and individuals who process Form W-2, Wage Getting a transcript of your return. The quickest way and Tax Statement, and Form W-2c, Corrected Wage and to get a copy of your tax transcript is to go to IRS.gov/ Tax Statement. Transcripts. Click on either “Get Transcript Online” or “Get Transcript by Mail” to order a free copy of your transcript. IRS social media. Go to IRS.gov/SocialMedia to see the If you prefer, you can order your transcript by calling various social media tools the IRS uses to share the latest 800-908-9946. information on tax changes, scam alerts, initiatives, prod- ucts, and services. At the IRS, privacy and security are Reporting and resolving your tax-related identity paramount. We use these tools to share public informa- theft issues. tion with you. Don’t post your SSN or other confidential in- • Tax-related identity theft happens when someone formation on social media sites. Always protect your iden- steals your personal information to commit tax fraud. tity when using any social networking site. Your taxes can be affected if your SSN is used to file a The following IRS YouTube channels provide short, in- fraudulent return or to claim a refund or credit. formative videos on various tax-related topics in English, Spanish, and ASL. • The IRS doesn’t initiate contact with taxpayers by email, text messages, telephone calls, or social media • Youtube.com/irsvideos. channels to request personal or financial information. • Youtube.com/irsvideosmultilingua. This includes requests for personal identification num- • Youtube.com/irsvideosASL. bers (PINs), passwords, or similar information for credit cards, banks, or other financial accounts. Watching IRS videos. The IRS Video portal • Go to IRS.gov/IdentityTheft, the IRS Identity Theft (IRSVideos.gov) contains video and audio presentations Central webpage, for information on identity theft and for individuals, small businesses, and tax professionals. data security protection for taxpayers, tax professio- nals, and businesses. If your SSN has been lost or Online tax information in other languages. You can stolen or you suspect you’re a victim of tax-related find information on IRS.gov/MyLanguage if English isn’t identity theft, you can learn what steps you should your native language. take. Free interpreter service. Multilingual assistance, provi- • Get an Identity Protection PIN (IP PIN). IP PINs are ded by the IRS, is available at Taxpayer Assistance Cen- six-digit numbers assigned to eligible taxpayers to ters (TACs) and other IRS offices. Over-the-phone inter- help prevent the misuse of their SSNs on fraudulent preter service is accessible in more than 350 languages. federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return with Getting tax forms and publications. Go to IRS.gov/ your SSN. To learn more, go to IRS.gov/IPPIN. Forms to view, download, or print all of the forms, instruc- tions, and publications you may need. You can also down- Checking on the status of your refund. load and view popular tax publications and instructions Go to IRS.gov/Refunds. (including the Instructions for Forms 1040 and 1040-SR) • on mobile devices as an eBook at IRS.gov/eBooks. Or • The IRS can’t issue refunds before mid-February 2021 you can go to IRS.gov/OrderForms to place an order. for returns that claimed the EIC or the additional child tax credit (ACTC). This applies to the entire refund, Access your online account (individual taxpayers not just the portion associated with these credits. only). Go to IRS.gov/Account to securely access infor- mation about your federal tax account. • Download the official IRS2Go app to your mobile de- vice to check your refund status. • View the amount you owe, pay online, or set up an on- line payment agreement. • Call the automated refund hotline at 800-829-1954. • Access your tax records online. Making a tax payment. The IRS uses the latest encryp- tion technology to ensure your electronic payments are • Review your payment history. safe and secure. You can make electronic payments on- • Go to IRS.gov/SecureAccess to review the required line, by phone, and from a mobile device using the identity authentication process. IRS2Go app. Paying electronically is quick, easy, and faster than mailing in a check or money order. Go to Using direct deposit. The fastest way to receive a tax IRS.gov/Payments for information on how to make a pay- refund is to file electronically and choose direct deposit, ment using any of the following options. which securely and electronically transfers your refund di- rectly into your financial account. Direct deposit also • IRS Direct Pay: Pay your individual tax bill or estima- avoids the possibility that your check could be lost, stolen, ted tax payment directly from your checking or sav- or returned undeliverable to the IRS. Eight in 10 taxpayers ings account at no cost to you. use direct deposit to receive their refunds. The IRS issues • Debit or Credit Card: Choose an approved payment more than 90% of refunds in less than 21 days. processor to pay online, by phone, or by mobile de- vice.

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• Electronic Funds Withdrawal: Offered only when filing The Taxpayer Advocate Service (TAS) your federal taxes using tax return preparation soft- ware or through a tax professional. Is Here To Help You • Electronic Federal Tax Payment System: Best option What Is TAS? for businesses. Enrollment is required. TAS is an independent organization within the IRS that • Check or Money Order: Mail your payment to the ad- helps taxpayers and protects taxpayer rights. Their job is dress listed on the notice or instructions. to ensure that every taxpayer is treated fairly and that you • Cash: You may be able to pay your taxes with cash at know and understand your rights under the Taxpayer Bill a participating retail store. of Rights. • Same-Day Wire: You may be able to do same-day How Can You Learn About Your Taxpayer wire from your financial institution. Contact your finan- Rights? cial institution for availability, cost, and cut-off times. The Taxpayer Bill of Rights describes 10 basic rights that What if I can’t pay now? Go to IRS.gov/Payments for all taxpayers have when dealing with the IRS. Go to more information about your options. TaxpayerAdvocate.IRS.gov to help you understand what • Apply for an online payment agreement (IRS.gov/ these rights mean to you and how they apply. These are OPA) to meet your tax obligation in monthly install- your rights. Know them. Use them. ments if you can’t pay your taxes in full today. Once you complete the online process, you will receive im- What Can TAS Do For You? mediate notification of whether your agreement has been approved. TAS can help you resolve problems that you can’t resolve • Use the Offer in Compromise Pre-Qualifier to see if with the IRS. And their service is free. If you qualify for you can settle your tax debt for less than the full their assistance, you will be assigned to one advocate amount you owe. For more information on the Offer in who will work with you throughout the process and will do Compromise program, go to IRS.gov/OIC. everything possible to resolve your issue. TAS can help you if: Filing an amended return. You can now file Form • Your problem is causing financial difficulty for you, 1040-X electronically with tax filing software to amend your family, or your business; 2019 Forms 1040 and 1040-SR. To do so, you must have e-filed your original 2019 return. Amended returns for all • You face (or your business is facing) an immediate prior years must be mailed. See Tips for taxpayers who threat of adverse action; or need to file an amended tax return and go to IRS.gov/ • You’ve tried repeatedly to contact the IRS but no one Form1040X for information and updates. has responded, or the IRS hasn’t responded by the date promised. Checking the status of your amended return. Go to IRS.gov/WMAR to track the status of Form 1040-X amen- How Can You Reach TAS? ded returns. Please note that it can take up to 3 weeks from the date you filed your amended return for it to show TAS has offices in every state, the District of Columbia, up in our system, and processing it can take up to 16 and Puerto Rico. Your local advocate’s number is in your weeks. local directory and at TaxpayerAdvocate.IRS.gov/ Contact-Us. You can also call them at 877-777-4778. Understanding an IRS notice or letter you’ve re- ceived. Go to IRS.gov/Notices to find additional informa- tion about responding to an IRS notice or letter. How Else Does TAS Help Taxpayers?

Contacting your local IRS office. Keep in mind, many TAS works to resolve large-scale problems that affect questions can be answered on IRS.gov without visiting an many taxpayers. If you know of one of these broad issues, IRS Taxpayer Assistance Center (TAC). Go to IRS.gov/ please report it to them at IRS.gov/SAMS. LetUsHelp for the topics people ask about most. If you still need help, IRS TACs provide tax help when a tax issue TAS for Tax Professionals can’t be handled online or by phone. All TACs now pro- vide service by appointment, so you’ll know in advance TAS can provide a variety of information for tax professio- that you can get the service you need without long wait nals, including tax law updates and guidance, TAS pro- times. Before you visit, go to IRS.gov/TACLocator to find grams, and ways to let TAS know about systemic prob- the nearest TAC and to check hours, available services, lems you’ve seen in your practice. and appointment options. Or, on the IRS2Go app, under the Stay Connected tab, choose the Contact Us option Low Income Taxpayer Clinics (LITCs) and click on “Local Offices.” LITCs are independent from the IRS. LITCs represent in- dividuals whose income is below a certain level and need

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to resolve tax problems with the IRS, such as audits, ap- a small fee for eligible taxpayers. To find a clinic near you, peals, and tax collection disputes. In addition, clinics can visit TaxpayerAdvocate.IRS.gov/about/LITC or see IRS provide information about taxpayer rights and responsibili- Pub. 4134, Low Income Taxpayer Clinic List. ties in different languages for individuals who speak Eng- lish as a second language. Services are offered for free or

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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.

Expenses: Itemized deductions 9 Adoption 6 How to report 11 A Campaign 6 Activities not for profit 4 Capital 6 Adjustments to gross income: Commuting 7 Armed forces reservists' travel Educator 3 K expenses 2 Qualified 3 Kickbacks 6 Performing artists 3 Educator Expenses 3 State or local government officials paid on Funeral and burial 6 fee basis 3 Health spa 7 L Unlawful discrimination claims 11 Hobby 4 Administrative fees: Home office 11 Legal expenses: IRA trustees 6 Impairment-related 3 Personal 8 Adoption expenses 6 Investment 5, 7 Political campaigns 6 Amortizable bond premium 9 Meals 8 Production of income 5 Appraisal fees 4 Professional promotion 8 Unlawful discrimination claims 5 Armed forces: Tax-exempt income 8 Life insurance 7 Reservists, travel expenses 2 Lobbying 7, 8 Assistance (See Tax help) Losses: Casualties and thefts 4, 9 F Deposits 5 Federal estate tax 10 Gambling 10 B Fees: IRA 5 Bank accounts: Appraisal 4 Mislaid cash or property 8 Check-writing fees 6 Check-writing 6 Roth IRA 5 Losses on deposits 5 Investment 4, 5 Bonds: IRA trustee 6 Amortizable premium 9 Professional accreditation 8 M Bribes 6 Fines 10 Burial expenses 6 Fines or penalties: Meal and lodging expenses: Deductible 10 Lunches with coworkers 8 Nondeductible 7 Working late 8 Form 2106: Missing children, photographs of 1 C Employee business expenses 12 Mutual funds: Campaign contributions 8 Form 4562: Indirect deductions 5 Campaign expenses 6 Depreciation and amortization 12 Capital expenditures 6 Funeral expenses 6 Casualty losses 4, 9 Check-writing fees 6 N Claim of right repayments 11 Nondeductible expenses 9 Clerical help, deductibility of 4 G Not-for-profit activities 4 Club dues 6 Gambling winnings and losses 10 Commissions 6 Government employees: Commuting expenses 7 State or local government officials paid on O Computers: fee basis 3 Office: Depreciation 4 Rent 4 Convenience fees 4 H Health spa 7 P D Hobbies 4 Partnerships: Deductions 10 Home: Indirect deductions 5 Deposits: Security system 7 Pass-through entities 5 Losses on 5 Telephone service 8 Penalties 10 Depreciation: Home office: Performing artists 3 Computers 4 Expenses 11 Work clothes 3 Disabilities, persons with: Principal place of business 11 Personal expenses 9 Work-related expenses 3 Political contributions 8 Dividends: Campaign expenses 6 Fees to collect 4 I Ponzi-type investment schemes 11 Service charges on reinvestment plans 5 Production of income expenses 5 Dues: Impairment-related work expenses 3 Income in respect of decedent: Professional accreditation fees 8 Club 6 Professional reputation and marketing 8 Lobbying 7 Estate tax 10 Individual retirement arrangements Publications (See Tax help) (IRAs): Trustees' fees 6 E Insurance: R Educator Expenses 3, 12 Life insurance 7 Recordkeeping requirements: Employee business expenses: Personal disability 6 Deductions, to verify 2 Form 2106 12 Interest income: Gambling winnings and losses 10 Performing artists 3 Fees to collect 4 Home office 11 Entertainers and Investments: Relief fund contributions 8 musicians (See Performing artists) Annuity, unrecovered investment in 11 Rent: Estates: Deposits, losses on 5 Office 4 Federal estate tax 10 Fees and expenses 5 Safe deposit box 5 Excess deductions: Seminars 7 Estates and trusts 10

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Repayments: Social Security repayments 5 Trustees: Claim of right 11 State or local governments: IRA administrative fees 6 Income 5 Officials paid on fee basis 3 Social Security benefits 5 Stockholders' meeting expenses 8 Reporting requirements: Depreciation 12 U Form 2106 12 Unemployment benefit fund Impairment-related work expenses 3 T contributions 9 Itemized deductions 11 Taxes: Unlawful discrimination claims 11, 12 Estate tax 10 Tax-exempt income expenses 8 Tax help 12 S Telephones: W Safe deposit box 5 Residential service 8 Wagering winnings and losses 10 S corporations: Theft losses 4, 9 Work: Indirect deductions 5 Travel and transportation expenses: Impairment-related expenses 3 Security systems, home 7 Another individual, paid by taxpayer 8 Wristwatches 6, 9 Seminars, investment-related 7 Armed forces reservists 2 Service charges on dividend Commuting 7 reinvestment plans 5

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