Eplanation about Alabama Misc and Other Deductions

[magnogreato]

I need assistance to understand what these mean under : LET'S CHECK

for any Alabama Deductions  Section...

The Misc. Itemized deductions subject to the 2% Ala. AGI

and the Other Itemized deductions not subject to 2% Ala. AGI

Many thanks

[LenaH]

The majority of your itemized deductions will flow from your federal itemized deductions. Items such as medical and dental expenses, property taxes, state tax and charitable contributions are items not subject to 2% of your AGI. In other words, you would get the full deduction. 

On the other hand, most miscellaneous deductions cannot be deducted in full and must be reduced by 2% of your Alabama adjusted gross income. Generally, the 2% limit applies to job expenses you paid for which you were not reimbursed. The limit also applies to certain expenses you paid to produce or collect taxable income. 

In order to get a tax benefit on your Alabama return, 2% of your state adjusted gross income would have to be greater than the deduction. Whatever deduction remains, is your deduction on your Alabama return. 

The miscellaneous itemized deductions that are NOT subject to the 2% limit are as follows:

• Gambling losses to the extent of gambling winnings.
• Deduction for repayment of amounts under a claim of right if more than $3,000.
• Unrecovered investment in a pension.
• Impairment-related work expenses of a disabled person.

[magnogreato]

I appreciate the feedback but I'm still at a loss of what I should do...or what to input if anything.

[ErnieS0 · Accepted solution]

If you did not enter all your itemized deductions in Deductions & Credits, you have another chance to enter those expenses on the Alabama screen Let’s Check for any Alabama Deductions. Enter these expenses—if you want—in Alabama if you did not enter them in Deductions & Credits in Federal.

Miscellaneous Deductions Expenses Subject to the 2% Limit include:

• Tax return preparation fee
• Safe deposit box rental.
• Certain legal and accounting fees
• Clerical help and office rent
• Custodial (e.g., trust account) fees
• Your share of the investment expenses of a regulated investment company.
• Certain losses on nonfederal insured deposits in an insolvent or bankrupt financial institution.

Miscellaneous Deductions Expenses NOT Subject to the 2% Limit include:

• Gambling losses to the extent of gambling winnings.
• Amortizable bond premium on bonds acquired before October 23, 1986.
• Unrecovered investment in a pension.
• Impairment-related work expenses of a disabled person

[magnogreato]

MANY THANKS!

[magnogreato]

MANY THANKS