Question

Unreimbursed employee business expenses, investment expenses, hobby expenses, and certain other expenses are classified as miscellaneous itemized deductions and are deductible only to the extent that their sum exceeds 2.

a. True
b. False

Answer 1

The claim about miscellaneous itemized deductions exceeding 2% being deductible is false due to the Tax Cuts and Jobs Act of 2017, which suspended such deductions for tax years 2018 through 2025.

Step-by-step explanation:

The statement that unreimbursed employee business expenses, investment expenses, hobby expenses, and certain other expenses are classified as miscellaneous itemized deductions and are deductible only to the extent that their sum exceeds 2% of adjusted gross income is b. False. This was the case prior to the Tax Cuts and Jobs Act of 2017. However, for tax years 2018 through 2025, the Act suspends the deduction for miscellaneous itemized deductions that would be subject to the 2% floor. Taxpayers are unable to claim these expenses as itemized deductions during this period.