Many expenses that may qualify as miscellaneous itemized deductions are deductible only to the extent they exceed, in aggregate, 2% of your adjusted gross income (AGI). Bunching these expenses into a single year may allow you to exceed this “floor.” So now is a good time to add up your potential deductions to date to see if bunching is a smart strategy for you this year.
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.