Deducting Tax Advice Fees

I tend to prepare my own taxes, but came across a post yesterday asking if tax advisory fees can be deducted from returns. The answer is technically yes, but the average taxpayer is unlikely to qualify.

Tax preparation fees fall under "miscellaneous itemized deductions." Other items in this category include job search fees, union, dues, legal fees related to tax advice, and even safety deposit box fees (provided that they hold investment related goods).

However, miscellaneous deductions are only deductible to the extent they exceed 2% of your adjusted gross income. So, if your income was $100k and you had $3k in miscellaneous expenses, then you would only qualify for a deduction of $1,0000. It should also be noted that while investment advice qualifies under miscellaneous itemized deductions, broker commissions don't.

You can read more about the wonderful world of miscellaneous itemized deductions in Pub 529 (note this is a pdf document) over at the IRS website.

Image: Blmurch @ Flickr

FULL DISCLOSURE, I'm not a CPA and don't pretend to be. Consult a tax attorney or CPA for your specific tax questions.