Investment Expense Tax Deduction Which Fees Can You Deduct?
Investment Expense Tax Deduction - Which Fees Can You Deduct? Skip to content
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Get Priority Access Attorney or accounting fees to produce or collect taxable incomeService charges for automatic investment and dividend reinvestment plansOffice expenses, such as rent or clerical help incurred in connection with your investments or collecting the taxable income on your investmentsThe cost to replace taxable securities that are mislaid, lost, stolen, or destroyedFees paid brokers, banks, or trustees to collect investment incomeFees paid for counsel and advice about investments that produce taxable incomeSafe deposit box rent if you use it to store taxable stocks, bonds, or other investment-related documentsFees paid to set up and manage your revocable trust insofar as it is to produce taxable income or manage a propertyInvestment expenses from pass-through entities such as non-publicly offered mutual funds, S corporations, or partnerships, provided the expenses are related to taxable incomeThe cost of investment newsletters, magazines, or website subscriptions to stock market news sites and research tools, as long as you use them to make decisions about taxable investments The TCJA eliminated most miscellaneous itemized deductions, including these investment-related expenses, for the tax years 2018 to 2025. While losing these write-offs is disappointing to some taxpayers, in reality, many investors weren’t receiving a tax benefit for these expenses anyway. That’s because three limitations caused many taxpayers to lose all or a portion of their deductions: Total miscellaneous itemized deductions had to be greater than 2% of adjusted gross income (AGI) before you could receive any benefitThe Pease limitation reduced overall itemized deductions for high-income taxpayersIf your income and deductions were too high, the alternative minimum tax might kick in and eliminate all or a portion of your itemized deductions As a result, many people who thought they were receiving a tax break for their investment expenses had actually lost the deduction or were getting a minimal benefit.
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By Janet Berry-Johnson Date December 06, 2021FEATURED PROMOTION
If you have investments, you may be wondering where you can deduct investment fees on your income tax return. Don’t spend a lot of time hunting around for the right place to enter them. Thanks to the Tax Cuts and Jobs Act of 2017 (TCJA), most investment-related expenses are no longer deductible. But in certain circumstances, you may still be able to get a tax break. If you use tax preparation software from H&R Block, it will help guide you through the deductions you’re still allowed to claim.Tax Reform and Deductible Investment Expenses
Before the TCJA, taxpayers who itemized deductions on Schedule A could deduct certain “miscellaneous itemized deductions.” These miscellaneous itemized deductions included things like:You own shares of Apple, Amazon, Tesla. Why not Banksy or Andy Warhol? Their works’ value doesn’t rise and fall with the stock market. And they’re a lot cooler than Jeff Bezos.
Get Priority Access Attorney or accounting fees to produce or collect taxable incomeService charges for automatic investment and dividend reinvestment plansOffice expenses, such as rent or clerical help incurred in connection with your investments or collecting the taxable income on your investmentsThe cost to replace taxable securities that are mislaid, lost, stolen, or destroyedFees paid brokers, banks, or trustees to collect investment incomeFees paid for counsel and advice about investments that produce taxable incomeSafe deposit box rent if you use it to store taxable stocks, bonds, or other investment-related documentsFees paid to set up and manage your revocable trust insofar as it is to produce taxable income or manage a propertyInvestment expenses from pass-through entities such as non-publicly offered mutual funds, S corporations, or partnerships, provided the expenses are related to taxable incomeThe cost of investment newsletters, magazines, or website subscriptions to stock market news sites and research tools, as long as you use them to make decisions about taxable investments The TCJA eliminated most miscellaneous itemized deductions, including these investment-related expenses, for the tax years 2018 to 2025. While losing these write-offs is disappointing to some taxpayers, in reality, many investors weren’t receiving a tax benefit for these expenses anyway. That’s because three limitations caused many taxpayers to lose all or a portion of their deductions: Total miscellaneous itemized deductions had to be greater than 2% of adjusted gross income (AGI) before you could receive any benefitThe Pease limitation reduced overall itemized deductions for high-income taxpayersIf your income and deductions were too high, the alternative minimum tax might kick in and eliminate all or a portion of your itemized deductions As a result, many people who thought they were receiving a tax break for their investment expenses had actually lost the deduction or were getting a minimal benefit.