PDF document

- 1 -

                            Userid: CPM               Schema: tipx Leadpct: 100% Pt. size: 10  Draft  Ok to Print
AH XSL/XML                  Fileid: … ons/P529/202012/A/XML/Cycle07/source                    (Init. & Date) _______

Page 1 of 18                                                                                  11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

            Department of the Treasury                       Contents
            Internal Revenue Service
                                                             Reminders                                   
                                                             Introduction                               
Publication 529
(Rev. December 2020)                                         Deductions for Unreimbursed Employee 
Cat. No. 15056O                                                Expenses                                
                                                               Unreimbursed Employee Expenses                  
                                                             Expenses You Can’t Deduct                         
Miscellaneous                                                  Miscellaneous Deductions Subject to the 2% 
                                                                   AGI Limit                             
                                                               Nondeductible Expenses                          
Deductions
                                                             Expenses You Can Deduct                            
                                                             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)             Expenses you can deduct.
• IRS.gov/Spanish (Español) • IRS.gov/Russian (Pусский)      •
• 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 

Jan 04, 2021

- 2 -

Page 2 of 18        Fileid: … ons/P529/202012/A/XML/Cycle07/source                                                             11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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 
  Schedule A (Form 1040-NR)                            Schedule A (Form 1040-NR) Itemized Deductions Army, Navy, Marine Corps, Air Force, or Coast Guard Re-
                                                                                                     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 

Page 2                                                                                                                 Publication 529 (December 2020)

- 3 -

Page 3 of 18 Fileid: … ons/P529/202012/A/XML/Cycle07/source 11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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

Publication 529 (December 2020) Page 3

- 4 -

Page 4 of 18 Fileid: … ons/P529/202012/A/XML/Cycle07/source 11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Miscellaneous Deductions Subject to income on those investments are miscellaneous itemized
deductions and are no longer deductible.
the 2% AGI Limit
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

Page 4 Publication 529 (December 2020)

- 5 -

Page 5 of 18 Fileid: … ons/P529/202012/A/XML/Cycle07/source 11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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

Publication 529 (December 2020) Page 5

- 6 -

Page 6 of 18 Fileid: … ons/P529/202012/A/XML/Cycle07/source 11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Trustee's Administrative Fees for IRA • Stockholders’ meeting attendance expenses.
Trustee's administrative fees that are billed separately and • Tax-exempt income earning/collecting expenses.
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.

Page 6 Publication 529 (December 2020)

- 7 -

Page 7 of 18 Fileid: … ons/P529/202012/A/XML/Cycle07/source 11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

• 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
4. Communicate directly with covered executive branch
the law.
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

Publication 529 (December 2020) Page 7

- 8 -

Page 8 of 18 Fileid: … ons/P529/202012/A/XML/Cycle07/source 11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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.

Page 8 Publication 529 (December 2020)

- 9 -

Page 9 of 18 Fileid: … ons/P529/202012/A/XML/Cycle07/source 11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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
Pre-1998 election to amortize bond premium. Gener-
Contributions
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
on Form 4797, Sales of Business Property, if you are oth-
Amortizable Premium on Taxable Bonds
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.

Publication 529 (December 2020) Page 9

- 10 -

Page 10 of 18 Fileid: … ons/P529/202012/A/XML/Cycle07/source 11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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- CAUTION 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,
poker, baccarat, roulette, wheel of fortune, etc.). The
Gambling Losses Up to the Amount of
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

Page 10 Publication 529 (December 2020)

- 11 -

Page 11 of 18 Fileid: … ons/P529/202012/A/XML/Cycle07/source 11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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
Annuity Income, for more information about the tax treat-
• You use it regularly and exclusively for administrative
ment of pensions and annuities.
or management activities of your trade or business,
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
RECORDS to these rules. Also keep canceled checks, sub- tions for unreimbursed employee expenses.
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

Publication 529 (December 2020) Page 11

- 12 -

Page 12 of 18 Fileid: … ons/P529/202012/A/XML/Cycle07/source 11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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
miscellaneous itemized deduction and is not deductible.
Employees with impairment-related work expenses.
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

Page 12 Publication 529 (December 2020)

- 13 -

Page 13 of 18 Fileid: … ons/P529/202012/A/XML/Cycle07/source 11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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-
line. The Social Security Administration (SSA) offers on-
– A self-employment tax feature.
line service at SSA.gov/employer for fast, free, and secure
online W-2 filing options to CPAs, accountants, enrolled

Publication 529 (December 2020) Page 13

- 14 -

Page 14 of 18 Fileid: … ons/P529/202012/A/XML/Cycle07/source 11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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-
bers (PINs), passwords, or similar information for
• Youtube.com/irsvideosASL.
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
(including the Instructions for Forms 1040 and 1040-SR) • Go to IRS.gov/Refunds.
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.

Page 14 Publication 529 (December 2020)

- 15 -

Page 15 of 18 Fileid: … ons/P529/202012/A/XML/Cycle07/source 11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

• 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

Publication 529 (December 2020) Page 15

- 16 -

Page 16 of 18  Fileid: … ons/P529/202012/A/XML/Cycle07/source           11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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 

Page 16                                                                 Publication 529 (December 2020)

- 17 -

Page 17 of 18              Fileid: … ons/P529/202012/A/XML/Cycle07/source                               11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

                       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                                   Legal expenses:
Administrative fees:                            Home office  11                              Personal 8
  IRA trustees 6                                Impairment-related  3                        Political campaigns 6
Adoption expenses      6                        Investment  5 7,                             Production of income     5
Amortizable bond premium       9                Meals 8                                      Unlawful discrimination claims 5
Appraisal fees 4                                Professional promotion 8                    Life insurance 7
Armed forces:                                   Tax-exempt income    8                      Lobbying  7 8, 
  Reservists, travel expenses   2
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                                      Meal and lodging expenses:
Burial expenses   6                           Fines or penalties:                            Lunches with coworkers    8
                                                Deductible  10                               Working late  8
                                                Nondeductible   7                           Missing children, photographs of 1
                                              Form 2106:
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,                                                                      N
Check-writing fees   6
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                                                                         Ponzi-type investment schemes    11
  Service charges on reinvestment plans 5     I
Dues:                                         Impairment-related work expenses     3        Production of income expenses   5
  Club 6                                      Income in respect of decedent:                Professional accreditation fees 8
  Lobbying  7                                   Estate tax 10                               Professional reputation and marketing 8
                                              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

Publication 529 (December 2020)                                                                                             Page 17

- 18 -

Page 18 of 18          Fileid: … ons/P529/202012/A/XML/Cycle07/source                  11:09 - 4-Jan-2021

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

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

Page 18                                                                        Publication 529 (December 2020)

PDF file checksum: 45245805

(Plugin #1/8.13/12.0)