What is the AGI limitation for most miscellaneous itemized deductions?

The adjusted gross income (AGI) limitation for most miscellaneous itemized deductions is indeed set at 2%. This means that to deduct certain expenses classified as miscellaneous itemized deductions, taxpayers can only deduct the amount that exceeds 2% of their AGI.

For example, if a taxpayer has an AGI of $50,000, 2% of this amount is $1,000. If their qualifying miscellaneous expenses total $2,000, they would only be able to deduct $1,000, which is the amount that exceeds the 2% threshold.

This limitation reflects a policy decision to reduce the number of deductions available and to maintain a tax system that favors broader tax bases and fewer itemized deductions. It's important to understand this limit for accurate tax planning and preparation, as well as to ensure compliance with IRS regulations.