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No tax benefit for e-filing by yourself

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in Small Business Tax

Q. I paid fees for the first time for e-filing federal and state tax returns. Is this cost deductible on next year’s return? H.S., Turlock, Calif.

A. Usually not. If you filed the returns yourself through software purchased from one of the tax preparation firms—including popular choices like TurboTax, TaxAct and H&R Block—this is a purely personal expense and can’t be deducted on either this year’s or next year’s federal return. However, e-filing fees charged by a tax professional may be classified as a miscellaneous expense. You can deduct your annual miscellaneous expenses in excess of 2% of your adjusted gross income (AGI).

Tip: Other tax assistance fees may be treated as deductible miscellaneous expenses subject to the 2%-of-AGI floor.

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