Can I Write This Off?

Can I write off CPA consultation fees?

TL;DR

CPA consultation fees can be deductible if they are related to your business or income-producing activities.

Detailed Answer

CPA consultation fees are deductible as a business expense if they are directly related to your trade or business. For individuals, these fees may be deductible if they are related to the determination, collection, or refund of any tax. However, due to the Tax Cuts and Jobs Act, miscellaneous itemized deductions, including tax preparation fees, are not deductible for individual taxpayers through 2025 unless they are related to a business or income-producing activity.

Where to Put It on the Tax Form

For businesses, report on Schedule C (Form 1040) under 'Other Expenses'. For rental activities, report on Schedule E (Form 1040).

Real World Example

A freelance graphic designer hires a CPA to review their business finances and provide tax advice. The fees paid to the CPA are deductible as a business expense on Schedule C.

Audit Risk & Documentation Tips

Keep detailed records of the CPA's invoices and the nature of the services provided. Ensure that the consultation is directly related to your business or income-producing activities to substantiate the deduction in case of an audit.

IRS Reference

IRS Publication 535 (Business Expenses) and IRS Publication 529 (Miscellaneous Deductions)

Relevant Industries

FreelancersSmall BusinessConsultantsReal Estate Agents