On behalf of Silver Tax Group posted in IRS Tax Audits on Thursday, July 27, 2017.
We have said before on this blog that is important to be aware of the deductions available to you. Despite the fact that the IRS is an intimidating presence, Michigan residents still have the legal right to take a large number of deductions without fear of retaliation by the agency.
What miscellaneous deduction is
It is not always easy to categorize tax deductions, however. The IRS labels many of these as “miscellaneous deductions.” And because there is no categorization, many taxpayers may not be aware these miscellaneous deductions exist.
There are a number of rules pertaining to such deductions. For example, certain costs only become deductible if the sum of the deduction exceeds two percent. This can include deductions for unreimbursed employee expenses, union dues, job search costs, etc.
On the other hand, there are deductions which are not subject to any limit. This can include casualty and theft losses, gambling losses (which cannot exceed gambling winnings), and losses occurring due to a Ponzi scheme.
It is also important to understand that certain expenses are never deductible. This would include expenses regarding the family or for personal living.
Improper deductions lead to serious results
Sometimes improper deductions taken on returns can lead to an IRS tax audit. There are also instances where an audit is in place and you have done nothing wrong. Whenever IRS action occurs, it can be essential to speak to a tax attorney to learn your legal options. Without attorney representation to provide your best defense, the chances of facing severe penalties from the IRS greatly increase.