19.4 Job Expenses Not Subject to the 2% AGI Floor

Expenses of teachers, instructors, counselors, principals, or aides.

Legislation to extend the deduction for educator expenses to 2012 had not yet been enacted when this book went to press, but the legislation was still expected. If there is an extension, eligible costs up to the $250 limit may be claimed as an “above-the-line” deduction (whether or not you itemize) as discussed in 12.2. Expenses not allowed as an above-the-line deduction must be claimed as miscellaneous itemized deductions subject to the 2% AGI floor (19.3). See the e-Supplement at jklasser.com for an update on the extension legislation.

Impairment-related work expenses.

Unreimbursed impairment-related work expenses are reported on Form 2106 (or Form 2106-EZ where eligible) and then the unreimbursed portion is entered on Line 28 of Schedule A as a miscellaneous itemized deduction that is not subject to the 2% AGI floor. You have to show:

1. You are physically or mentally disabled. The physical or mental disability must result in a functional limitation of employment that substantially limits one or more major life activities. Generally, showing blindness or deafness will meet this test, but other disabilities that impair your ability to walk, speak, breathe, or perform manual tasks also may qualify if they limit the ability to work.
2. You incur the expenses in order to work. The expenses must be ordinary and necessary to allow you to work. Attendant care services at a place of employment that are necessary for you to work are also deductible.
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Life Insurance Agents and Food Deliverers
Statutory employees, such as full-time life insurance salespersons, may deduct expenses on Schedule C and so avoid the 2% AGI floor (40.6).
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Expenses of performing artists.

As a performing artist, you may deduct job expenses from gross income, whether or not itemized deductions are claimed (12.2).

You report the performing artist expenses on Form 2106 (or Form 2106-EZ where eligible) and enter the total as an above-the-line deduction (allowed even if you do not itemize) on Line 24 of Form 1040, instead of on Schedule A. If you do not meet the tests, the expenses are deducted on Schedule A subject to the 2% AGI floor.

Moving expenses.

Moving expenses to a new job location (12.3), although job related, are claimed on Form 3903 and then deducted directly from gross income (above-the-line deduction) on Form 1040, Line 26, rather than being claimed as an itemized deduction on Schedule A.

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3.12.74.18