Filling out the Form 1040 can be a daunting experience, to say the least. It has been the downfall of numerous would-be Obama appointees, and its 76 cryptic lines come complete with 92 pages of instructions and a whole rainbow of schedules and attachments. It sometimes baffles even the most stalwart of tax experts, including your humble correspondent. If you are among the millions of taxpayers who shudder at the thought of wading into that morass alone, never fear. Tax preparation fees are tax deductible.
What are tax preparation fees? At this time of the year, H&R Block (Stock Quote: HRB) and Jackson Hewitt (Stock Quote: JTX) come to mind, and their fees are definitely deductible. The cost of a private accountant is deductible too. But that’s not all. You can also deduct the cost of tax preparation software like TurboTax (Stock Quote: INTU) or TaxCut. Electronic filing fees are deductible as well. And don’t forget things like appraisal fees for theft and casualty loss deductions.
Last, but not least, read up; you can deduct the cost of tax publications. Internet subscriptions and books about taxes qualify, so if you paid a fee to read this column, it really would be the Daily Deduction.
Like most tax benefits, the deduction for tax preparation expenses is only available in the year that you actually spent the money. So if you hired help last spring to prepare your 2007 return, you should deduct the cost on your 2008 return. Likewise, if you buy TaxCut to tackle your 2008 return, the cost is deductible in 2009. The moral of the story? Don’t forget to save your receipt, and check back with us soon to learn about how to maximize the tax benefit of your investment expenses.
Be sure to check out the complete archive of Daily Deductions!