Can I Write This Off?Is tax preparation fees deductible a business expense?
TL;DR
Tax preparation fees are deductible as a business expense if they are related to the business portion of your tax return.
Detailed Answer
Where to Put It on the Tax Form
Report on Schedule C (Form 1040) for sole proprietors or on the appropriate business tax return form for other entities.
Real World Example
A freelance graphic designer pays $500 for tax preparation services. The preparer charges $300 for the business portion (Schedule C) and $200 for the personal portion. The designer can deduct the $300 as a business expense on Schedule C.
Calculation Required
A calculation is required for this deduction.
Calculate the portion of the tax preparation fee that is attributable to business-related services. This may involve allocating the fee based on the time spent or the complexity of the business versus personal tax matters.
Audit Risk & Documentation Tips
Maintain detailed invoices from your tax preparer that clearly separate business and personal tax preparation costs. Keep records of how you allocated the fees to support your deduction in case of an audit.
IRS Reference
IRS Publication 535, Business Expenses
Relevant Industries
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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