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How do I deduct are tax preparation fees deductible on my taxes?

TL;DR

Tax preparation fees are generally not deductible for individual taxpayers under the Tax Cuts and Jobs Act (TCJA) from 2018 through 2025.

Detailed Answer

Prior to the TCJA, tax preparation fees were deductible as a miscellaneous itemized deduction, subject to a 2% of adjusted gross income (AGI) floor. However, the TCJA suspended these deductions for individuals. Businesses, including self-employed individuals, can still deduct tax preparation fees as a business expense. For example, a sole proprietor can deduct the portion of tax preparation fees related to their business on Schedule C.

Where to Put It on the Tax Form

For businesses, report on Schedule C (Form 1040) as a business expense.

Real World Example

A freelance graphic designer pays $500 for tax preparation services. They can deduct the portion of the fee related to their business income on Schedule C, reducing their taxable business income.

Calculation Required

A calculation is required for this deduction.

Determine the portion of the tax preparation fee related to business activities by calculating the percentage of the fee attributable to business versus personal tax services.

Audit Risk & Documentation Tips

Keep detailed invoices from your tax preparer that clearly separate business-related and personal tax preparation services. Maintain records of how you allocated the fees to support your deduction in case of an audit.

IRS Reference

IRS Publication 529, Miscellaneous Deductions; IRS Publication 334, Tax Guide for Small Business

Relevant Industries

FreelancersSmall BusinessSelf-EmployedAccountants

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 15, 2025

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