Can I deduct my tax expenses for filing?

Forum|Forum|3 years ago
April 17, 2022
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TurboTax Deluxe Online

ErnieS0

It depends. Business and rental property owners can deduct tax preparation fees as a business or rental expense.

The cost of hiring a tax professional, such as a certified public accountant (CPA), to prepare that part of your tax return relating to your business as a sole proprietor is deductible on Schedule C (Form 1040). Deduct expenses of preparing tax schedules relating to rentals or royalties (Schedule E), or farm income and expenses (Schedule F) on the appropriate schedule. Expenses for completing the remainder of the return are miscellaneous deductions and are no longer deductible.

Tax Prepartion

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bobcanna

Thanks for your answer! How does one determine the percentage of tax preparation expense that can be applied to a rental property or sol proprietor business?

SusanY1

There is no one "right" way to determine the preparation (or software) fees attributable to a business. For TurboTax users, a reasonable method might be to list the cost of the difference between the package required to prepare the forms related to the rental or sole proprieort business compared to a package that doesn't include those forms.

It could also be parsed out in another reasonable way. For example it wouldn't be unreasonable for someone with personal investments, regular wage income, a rental property, and a business to determine that 25% of the fee went to each of these areas (so 25% would be deductible on both the Schedule E and Schedule C). One might also determine that a different percentage of the "work" was done for each area and allocate that way.

Similarly, if the only income on the return comes from the rental and the sole proprietor business it would be easy to support half to each activity.

Any "reasonable" method that doesn't double-count the cost is acceptable to use.

@bobcanna

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