What types of itemized deductions are subject to the 2%-of-AGI floor?

The correct answer focuses on the various deductions subject to the 2%-of-AGI floor, which pertains to certain miscellaneous itemized deductions. These deductions include transportation, education, job-seeking expenses, tax preparation fees, investment-related expenses, and hobby expenses.

The reason this category is significant is that they can be deducted only to the extent that their total exceeds 2% of your Adjusted Gross Income (AGI). This means that only the portion of these expenses that surpasses the 2%-of-AGI threshold can be itemized, limiting the amount one can claim.

Other choices provided do not represent deductions that fall under this specific category. For instance, mortgage interest and property taxes, while they are itemized deductions, are not subject to the 2%-of-AGI floor. Charitable contributions also do not fall under this floor and have specific limitations and guidelines of their own. Medical expenses and state taxes have different thresholds and calculations for deductions, making them irrelevant to the 2%-of-AGI floor context.

Overall, understanding which deductions qualify for this floor is critical for accurately preparing taxes and maximizing allowable itemized deductions.