Amounts you pay to produce or collect income that you have to include in your gross income for federal income tax purposes,
Expenses incurred in managing, conserving, or maintaining your income-producing property, and
Expenses related to your federal income tax liability itself, including amounts paid to determine the amount of tax you have to pay, to contest that amount, to pay the tax, or to claim a tax refund.
The expenses that you can deduct for the first two categories above must be “reasonably and closely related to these purposes”. You should enter the total amount you paid to produce or collect taxable income and manage or protect property held for earning income and list the type and amount of each expense on the dotted lines next to line 22. The following are descriptions of the types of expenses that qualify for deduction as other expenses subject to the 2% of adjusted-gross-income limit.
You can deduct office rent and expenses, and clerical help for managing your investments and collecting your taxable income. These expenses include depreciation on your home computer if you use it to manage your investments. You can deduct the rental you pay for a safe deposit box if you use it to store stock certificates, bonds, or other documents and papers relating to property that produces taxable income. If you use the safe deposit box only to store jewelry or other personal items, the rental is not deductible.
Investment fees, custodial fees, trust management fees and other charges for managing your investments are deductible. So are fees paid to brokers, trustees, or other agents to collect dividends and interest. But you cannot deduct fees paid to brokers to buy or sell securities or other investment property. Fees paid to buy securities or investment property should be added to the basis of the property. Fees paid to sell the property are treated as selling expenses in determining the gain or loss on the sale.