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Is the money paid to electronically file my state tax return using Turbo Tax an expense I can deduct from a tax refund received in 2017?

Forum|Forum|7 years ago
June 6, 2019
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I paid Turbotax to file my state income taxes electronically last year. I got a refund from the state. Can I deduct the amount I paid to electronically to file my state income tax refund from 2017 Federal income?

TurboTax Deluxe Windows

Best answer by KatherineC

You can deduct the TurboTax fees that you paid to prepare your 2016 return on your 2017 return.

Individuals are cash basis taxpayers so you can deduct the amounts you actually paid in 2017 (for your 2016 return). The amount you pay to prepare your 2017 return will be deducted on your 2018 return.

To input your TurboTax fees:

Open your return
Click on Federal Taxes
Click on Deductions and Credits
Scroll to Other Deductions and Credits
Click the button beside Tax Preparation Fees. (See screenshot below)
Answer yes
Enter the total amount you paid in 2017

Will your fees make much impact? That depends. Tax preparation fees fall in the category of Miscellaneous Itemized Deductions.

So first of all, you would have to itemize deductions as opposed to taking the standard deduction.
Second of all, Miscellaneous Itemized Deductions are reduced by 2% of your Adjusted Gross Income. (Line 37 of your Form 1040)

So, if your Miscellaneous Itemized deductions are less than 2% of your Adjusted Gross Income, they would not impact your tax return.

M

Mick-W-of-No--VAAuthor

What I'm asking is whether the "extra"money I paid to electronically file my 2016 State return using TurboTax in 2017, for which I received a refund, can be deducted from the income shown on my 2017 Federal return.

MichaelL1

Employee

It can only be deducted as a Sch A Misc Itemized deduction as shown in answer below.

K

KatherineCAnswer