Should you bunch into 2016?
If your miscellaneous itemized deductions are getting close to – or they already exceed – the 2% floor consider incurring and paying additional expenses by Dec. 31 such as:
- Deductible investment expenses including advisory fees custodial fees and publications
- Professional fees such as tax planning and preparation accounting and certain legal fees
- Unreimbursed employee business expenses including vehicle costs travel and allowable meals and entertainment.
But beware …
These expenses aren’t deductible for alternative minimum tax (AMT) purposes. So don’t bunch them into 2016 if you might be subject to the AMT this year.
Also if your AGI exceeds the applicable threshold certain deductions – including miscellaneous itemized deductions – are reduced by 3% of the AGI amount that exceeds the threshold (not to exceed 80% of otherwise allowable deductions). For 2016 the thresholds are $259400 (single) $285350 (head of household) $311300 (married filing jointly) and $155650 (married filing separately).
If you’d like more information on miscellaneous itemized deductions the AMT or the itemized deduction limit let us know.