Tax preparation fees belongs on Line 17, legal and professional services.
Why line 17
The part of a preparer's fee that covers Schedule C, the depreciation schedule and the self-employment tax computation is a business expense on line 17. The part covering your personal return, your itemized deductions or your investment income is personal and is not deductible anywhere, since the miscellaneous itemized deduction for tax preparation is gone. Ask the preparer to show the business portion on the invoice, because one lump sum invites the whole amount to be questioned.
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 tax preparation fees lands on Line 17 without you sorting it.
Start for freeWhat tax preparation fees is confused with
- not deductible, not deductible
- The slice of the fee attributable to your personal Form 1040 is not deductible, so a lump sum invoice has to be split before anything goes on line 17.
- Line 27a, other expenses
- Tax software you buy and run yourself is commonly listed in other expenses, while a professional's fee for the same work is the line 17 item.
Examples that belong on line 17
- $450 of a $700 preparer invoice, the part itemized to Schedule C and Form 4562
- A $250 fee for preparing quarterly estimated tax vouchers for the business
- $180 for a state business return prepared alongside the federal one
- A $300 charge for preparing the business sales tax filings
What does not belong here
- The portion covering your personal 1040, Schedule A or investment income
- Fees to contest a personal tax matter unrelated to the business
- The tax payment itself, which is never a line 17 expense
The limit that applies
Only the business portion is deductible, and the personal portion is no longer deductible as a miscellaneous itemized deduction.
What to keep
Keep an invoice that states the business portion separately, or the preparer's own time allocation. A lump sum with no split is the weak point on this deduction.
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 |
| fractional CFO 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 |
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 tax preparation fees lands on Line 17 without you sorting it.
Start for free