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You don’t need to be a round-the-clock trader to deduct the cost of investing. Even if you have a full-time job (either at home or away from home), you could be taking deductions related to your investment activity.

What are investment expenses? Outlays for things like fees for professional investment advice, accounting and legal fees related to investment activities, subscriptions to online investment publications, the portion of Internet access charges incurred to follow and trade investments, the trusty home computer and even your home office. If you qualify for this last one, though, watch out — it can cost you more than it can save you if you’re not careful. (See below.)

There are a few things you can’t deduct. First, costs related to tax-exempt securities; they are nondeductible because they generate tax-free income. Second, trading commissions. These are added to the cost basis of the investment, giving you a tax break when you sell the securities. And finally, travel costs to attend investment conventions and seminars and stockholder meetings are generally nondeductible, as are attendance fees for conventions and seminars. (Investment interest expense, such as margin interest on brokerage accounts, is a whole different subject; use IRS Form 4952 to calculate what your deductible interest expense is.)

Who can take these deductions? Just about anybody, as long as these expenses — along with your other “miscellaneous itemized deductions” like tax-preparation fees and unreimbursed business expenses — exceed 2% of your adjusted gross income (AGI). (Much more favorable rules apply to “traders.” See below.) But frankly, most taxpayers fail to clear the “2% of AGI” hurdle.

Lastly, miscellaneous itemized deductions are completely disallowed for alternative minimum tax (AMT) purposes. So if you are in the AMT mode, you may get little or no actual tax benefit.

The bottom line for investment expenses: you must have either relatively low income or rather hefty expenditures (or both) and avoid the AMT to net any significant tax savings — unless you can claim “trader” status. But don’t give up hope without running the numbers. To show you how the rules work, we outlined three situations below.

Part-time investor with full-time job outside the home (or no job)

Obviously, this is the most common situation. You can deduct expenses directly related to investing activities, subject to the 2% of AGI. (As mentioned, expenses to generate tax-free income are nondeductible.)

If you use a home computer and peripheral equipment to manage your investments, you can depreciate the investment-use portion of the cost using the straight-line method — 10% in the first year, 20% in years 2 through 5 and 10% in year 6. Like other investment expenses, the depreciation is “thrown in the pot” with your other miscellaneous itemized deductions and is then subject to the 2% of AGI.

Purchased software used for investment management can generally be written off over three years (or earlier if it becomes worthless). However, programs that are useful for one year or less should be fully written off in the year purchased.

Using your home office for investment management activities won’t cut your taxes; only business usage (as opposed to investment usage) counts for this purpose.

Part-time investor who is self-employed and works in the home