Most miscellaneous itemized deductions are gone for good. Congress permanently eliminated the entire category of write-offs once subject to the 2% adjusted gross income floor, so unreimbursed employee expenses, investment advisory fees, tax preparation costs, safe deposit box rentals, and similar items no longer reduce your federal tax bill. A smaller group of deductions that were never part of that 2% category survived and can still be claimed on Schedule A if you itemize.
What Congress Eliminated and When
The Tax Cuts and Jobs Act suspended all deductions subject to the 2% AGI floor for tax years 2018 through 2025. That suspension was set to expire after 2025, which would have automatically restored the deductions. It didn’t. The One Big Beautiful Bill Act, signed into law on July 4, 2025, struck the sunset date and made the elimination permanent for all tax years beginning after December 31, 2017.1Office of the Law Revision Counsel. 26 USC 67 – 2-Percent Floor on Miscellaneous Itemized Deductions
If you pay for your own work supplies as a W-2 employee, hire a financial advisor, use a tax preparer, or run a home office for an employer, none of those costs are deductible on your federal return. Only new legislation could bring them back.
Deductions You Can Still Claim on Schedule A
Several deductions people associate with the old miscellaneous category survived because the tax code specifically excluded them from the definition of “miscellaneous itemized deduction.” The permanent elimination doesn’t touch them. They’re reported on Line 16 of Schedule A as “Other Itemized Deductions.”2Internal Revenue Service. Schedule A (Form 1040)1Office of the Law Revision Counsel. 26 USC 67 – 2-Percent Floor on Miscellaneous Itemized Deductions
Gambling Losses
Gambling losses are deductible, but only up to the amount of gambling winnings you report on your return. If you won $5,000 and lost $8,000, your deduction stops at $5,000. The deduction can offset gambling income but never produce a net loss.3Internal Revenue Service. Topic No. 419, Gambling Income and Losses
Recordkeeping matters here. The IRS expects a contemporaneous diary or log showing the date and type of each wager, the name and location of the establishment, the names of people present, and the amounts won or lost. W-2G forms, wagering tickets, canceled checks, and payout slips back up the diary if you’re audited.4Internal Revenue Service. Diary or Similar Record
Casualty and Theft Losses from Federally Declared Disasters
Personal casualty and theft losses are deductible only when they result from a federally declared disaster. A house fire, a car break-in, or localized flooding without a presidential disaster declaration will not qualify.5Internal Revenue Service. Topic No. 515, Casualty, Disaster, and Theft Losses
Even qualifying losses face two filters. Each event is first reduced by $500. After that reduction, your combined losses for the year must exceed 10% of your AGI before any deduction applies.6Internal Revenue Service. Publication 547 – Casualties, Disasters, and Thefts At a $75,000 AGI, only losses above $7,500 (after the per-event reduction) produce a deduction.
One exception: if you have personal casualty gains in a year, such as insurance proceeds exceeding your basis in destroyed property, you can offset those gains with personal casualty losses from any event, not just declared disasters.7Office of the Law Revision Counsel. 26 U.S. Code 165 – Losses
Impairment-Related Work Expenses
If you have a physical or mental disability that limits your ability to work, you can deduct expenses necessary to do your job, such as attendant care at your workplace and specialized equipment.8Internal Revenue Service. Living and Working with Disabilities The disability must functionally limit your employment; a general health condition that doesn’t affect your capacity to work will not qualify. You can claim this either as an itemized deduction on Schedule A or, if you file Form 2106, as an adjustment to income.9Internal Revenue Service. Instructions for Form 2106
Unrecovered Investment in an Annuity
When someone receiving annuity payments dies before recovering their full investment in the contract, the unrecovered amount is deductible on the annuitant’s final return. The rule prevents money already taxed at the time of investment from being taxed again simply because the annuitant did not live long enough to receive it all back.10Office of the Law Revision Counsel. 26 U.S. Code 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts
Other Line 16 Deductions
Narrower situations may still produce a deduction under “Other Itemized Deductions”:11Internal Revenue Service. Publication 529 Miscellaneous Deductions
- Amortizable bond premium on a taxable bond bought above face value.
- Federal estate tax on income in respect of a decedent, when you inherit income the decedent was owed and the estate paid federal estate tax on it.
- Repayments over $3,000 under a claim of right, when you reported income in a prior year and later had to give it back.
- Losses from Ponzi-type investment schemes.
- Casualty and theft losses on income-producing property, which do not require a federal disaster declaration.
- Excess deductions passed through to beneficiaries when an estate or trust terminates.
Employees Who Can Still Deduct Job Expenses
Four narrow groups of workers can still write off unreimbursed job expenses, but not on Schedule A. They file Form 2106 and take the deduction as an adjustment to income on Schedule 1, which reduces AGI whether or not they itemize:9Internal Revenue Service. Instructions for Form 2106
- Armed Forces reservists who travel more than 100 miles from home for reserve duties, for unreimbursed travel, lodging, and meals.
- Qualified performing artists who meet strict income limits. The qualifying AGI threshold has not been updated since 1986 and remains extremely low, so very few performers qualify.
- Fee-basis state or local government officials paid entirely through fees charged directly to the public rather than a salary.
- Employees with impairment-related work expenses.
If you’re a W-2 employee outside these groups, there is no federal deduction for your out-of-pocket work costs.
Estates and Non-Grantor Trusts Kept a Carve-Out
The permanent elimination hits individuals hardest, but estates and non-grantor trusts still get to deduct administration expenses that would not have been incurred if the property weren’t held in a trust or estate. Fiduciary fees, legal costs of trust administration, and appraisal fees for estate assets remain deductible. The IRS confirmed this in Notice 2018-61, treating them as above-the-line deductions rather than miscellaneous itemized deductions.12Internal Revenue Service. Notice 2018-61 A bundled bill covering both trust administration and investment management has to be allocated: the investment management portion, being an expense any individual investor would face, falls under the suspension, while the portion unique to trust administration survives.
Your State Return May Be Different
Federal rules control your Form 1040, but not every state adopted the TCJA changes. Some states still allow unreimbursed employee business expenses and other write-offs that vanished federally. If you file a state income tax return, check whether it conforms to current federal treatment or uses older rules. You may pick up state-level deductions you can’t claim federally.
How to Claim What’s Left
Itemizing only helps if your total itemized deductions exceed the standard deduction for your filing status. For 2026, the standard deduction is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household.13Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Itemizing usually pays off only when large mortgage interest, state and local taxes, or charitable contributions sit alongside the deductions above.
Surviving deductions go on Line 16 of Schedule A, where the form asks you to list the type and amount of each.2Internal Revenue Service. Schedule A (Form 1040) Keep every receipt, statement, and supporting document. The IRS generally requires you to hold records for three years from the date you file, or two years from the date you paid the tax, whichever is later. If you underreport income by more than 25% of your gross income, that period extends to six years.14Internal Revenue Service. How Long Should I Keep Records?
Claiming a deduction that no longer exists, such as tax preparation fees or investment advisory costs, can trigger an accuracy-related penalty of 20% of the resulting underpayment. Returns that try to revive suspended expenses are easy to flag. When you aren’t sure whether a specific expense still qualifies, check IRS Publication 529 or ask a tax professional before you file.