Fractional CFO fees belongs on Line 17, legal and professional services.
Why line 17
A fractional or part-time CFO is an outside financial professional, so the retainer sits on line 17 next to your accountant and your lawyer. The line does not change because the engagement is monthly or because the person joins your meetings, as long as they are not your employee. Work that is really investment advice on your personal portfolio is not a business expense at all.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so fractional CFO fees lands on Line 17 without you sorting it.
Start for freeWhat fractional CFO fees is confused with
- Line 26, wages
- Put the person on payroll with a W-2 and the cost becomes wages on line 26, with payroll taxes following.
- not deductible, not deductible
- Fees for raising capital or negotiating a sale of the business are costs of a capital transaction, not an ordinary line 17 deduction.
Examples that belong on line 17
- A $2,500 a month fractional CFO retainer during a growth push
- $1,200 to build a cash flow model and a 13-week forecast
- A $600 monthly engagement covering month-end review and a lender package
- $3,000 for an outsourced controller to rebuild the chart of accounts
What does not belong here
- Personal investment management fees
- Payroll for an employee CFO, which is wages
- Fees tied to selling the business, which are capital transaction costs
What to keep
Keep the engagement letter, the monthly invoices, and the deliverables. The deliverables are what show the work served the business rather than your personal finances.
Other expenses on line 17
| Expense | Line |
|---|---|
| a registered agent's annual fee | Schedule C, Line 17 |
| a tax prep fee covering the 1040 and Schedule C | Schedule C, Line 17 |
| an appraiser's fee | Schedule C, Line 17 |
| bookkeeper and accountant fees | Schedule C, Line 17 |
| business consultant fees | Schedule C, Line 17 |
| legal fees for drafting a client contract | Schedule C, Line 17 |
| legal fees to sue a customer | Schedule C, Line 17 |
| tax preparation fees | Schedule C, Line 17 |
Related lookups
Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so fractional CFO fees lands on Line 17 without you sorting it.
Start for free