Tax Blog

February 20, 2009
Deducting Fees Paid For Tax Preparation On Your Federal Tax Return
categorized as: Tax Deductions

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One commonly overlooked expense that you can claim on your return this year is deducting fees paid for tax preparation on your Federal tax return for last year. If you file an itemized tax return, you can deduct the costs of your purchase of any tax preparation software programs, tax publications, electronic filing costs, and preparation fees. Please note, the only way to claim this deduction is if you file an itemized tax return.

The fees can be deducted on several forms, depending on your use of the services. If you are self employed, it will be taken on Schedule C. Others may end up using Schedules A, C-EZ, E, or F to list this deduction, or a combination of all forms, with regard to whether the service is for personal or business use.

This tax break really makes getting your taxes professionally prepared worthwhile because the tax preparers are schooled in all the latest IRS rules and regulations and know about new tax breaks. Many companies also offer a good guaranteed against errors and will even stand behind their work if audited.

Be sure to save any receipts for purchases of software for tax preparation, and other receipts that are for tax preparation. Then, all you need to do is put the deduction figures into the proper line on your itemized tax return to claim the credit for these expenses. It is a good deduction, and the IRS wants your returns done correctly as much as you do. Whether you use an accountant, a tax preparation service, or do it yourself with purchased tax preparation software, the costs are deductible.

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5 Responses

Fiscal Tax
The simple answer is no.
John A. Camarillo
2011 - I have started a business providing personal financial recording keeping for individuals/families. Can the cost of my service be deducted as part of: Tax Preparation Fees (Line 22)
Fiscal Tax
Tax preparation fees are deducted in the "Miscellaneous Deductions" section of schedule A (line 22). All deductions in this section of Schedule A are subject to a 2%-of-AGI limitation.
Ralph Gilbertson
I did not claim tax preparation fees on my 2009 tax return because I was told that tax preparation fees are not deductible as an investment expense unless if they exceed 2% of income. Is this correct?
If you work overseas and have paid no federal tax in 2009 (due to foreign credit allowance) can you still claim the fees for the preparation of 2008 taxes?

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