Are investment advisor fees still deductible on 2018 CA state taxes even though they are not allowed on 2018 Federal taxes?

[wmnrand]

These investment advisor fees were deductible on both Federal and state taxes in 2017 if using itemized deductions.

[Critter]

See page 81 - 85  : <a rel="nofollow" target="_blank" href="https://www.ftb.ca.gov/law/legis/Federal-Tax-Changes/2017.pdf">https://www.ftb.ca.gov/law/legis/Fede...>

[kenfuruta]

Turbotax currently (as of 4-11-18) does not provide a way to include an adjustment to Federal itemized deductions to add these fees for California.  This needs to be fixed.

[kenfuruta]

Date should be 4-11-19.

[ScruffyCurmudgeon]

California chose to not conform to the changes implemented at the Federal Level with the tax changes of 2017 effective in 2018.  Your investment advisory fees as well as all previously acceptable California itemized deductions are still allowable for California Income Tax.

California Itemized Deductions

California Law (R&TC section 17076) California conforms, under the PITL, to the federal rules relating to miscellaneous itemized deductions under IRC section 67, as of the specified date of January 1, 2015,246 with modifications, but does not conform to the federal suspension of all miscellaneous itemized deductions. 

California supports most of the (pre-2018) IRS-approved itemized deductions you can claim on your Federal income tax, but with some California-specific limitations. Before you attempt to claim any itemized deductions you must verify that it is allowed on your California tax return, even if you were able to claim it on your Federal return.

A variety of expenses can be itemized as deductions on your California tax return. Here's a list of some of the most popular itemized deductions.

• IRA Contribution Deduction - You can deduct a limited contribution to your qualifying Individual Retirement Account every year. The deduction limits for 2012 are $5,000 per year for individuals under 50, and $6,000 per year for individuals 50 or over.
• Business Deductions - Qualifying business expenses, business losses, and losses due to theft or depreciation may be itemized and deducted.
• Self-Employment Deductions - If you pay both the employee and the employer's half of the payroll tax, you may deduct the employer's half from your gross income. This deduction generally applies to individuals who are self-employed or small business owners.
• Mortgage Interest Deduction - If you have a mortgage on a first or second home, you may deduct mortgage interest paid as defined in 26 U.S.C. § 163(h).
• Medical Deductions - You can deduct up to 7.5% of your out-of-pocket medical and dental expenses. Self employed individuals may also deduct premiums for qualifying health insurance plans.
• Education and Tuition Deduction - If you paid tuition to an accredited college or university, you can deduct some or all of the tuition and fees you paid. You cannot deduct housing, food, or other secondary expenses, but you may deduct interest accrued on student loans.
• Charitable Donations - Donations to qualifying charities or nonprofit organizations are 100% tax deductible, up to 50% of your gross income.
• Property Tax Deduction - Many states allow you to deduct any property tax paid to a county or municipality from your gross income.

[birdie8769]

i have a customer who is filing her taxes for 2018 from california and need the service code so she can pay for it with a credit card

[Critter]

If you are a paid tax pro then you cannot be using the Turbotax program ... if you are using a professional program then seek assistance from them not a public forum for TT users. 

[jgejweitz]

Re: Are investment advisor fees still deductible on 2019 NJ state taxes even though they are not allowed on 2019 Federal taxes?

[ScruffyCurmudgeon]

@jgejweitz In short to reply to your specific question, No - investment advisory fees or comparable expenses such as ADR fees are not only not deductible at the Federal level but also not deductible at the New Jersey income filing level.

For reference - (and for future tax payers of New Jersey seeking information who chance upon this Q&A) , here are the following deductible expenses allowed on NEW JERSEY income tax filing:

Deductions

• Alimony and Separate Maintenance Payments
  Payments of alimony or for separate maintenance are deductible by the payer if reported as income by the payee.  You can deduct any court-ordered alimony or separate maintenance payments you made. Do not deduct payments for child support.
  
  
• Medical Expenses to the extent not reimbursed or covered by insurance - Note: Self-Employed Health Insurance Deduction (see text below)
  Unreimbursed medical expenses in excess of 2% of gross income; qualified medical savings account contributions; and for the “self-employed,” qualified health insurance costs.  You can deduct certain medical expenses that you paid during the year for yourself, your spouse or domestic partner, and your dependents. However, you cannot deduct expenses for which you were reimbursed. Only expenses that exceed 2 percent of your income can be deducted. Some examples of allowable medical expenses are: payments for doctor's visits, dental care, hospital care, eye examinations, eyeglasses, medicine, and x-rays or other diagnostic services directed by your physician or dentist. Insurance premiums, including amounts paid under Social Security for Medicare, can be used as medical deductions. You also can deduct transportation costs that are allowable on your federal return. If you deduct medical expenses in one year and are reimbursed in the next, you must include the reimbursement as income in the year you receive the payment. 
  
  If you are considered self-employed for federal tax purposes, or you received wages in 2019 from an S corporation in which you were a more-than-2% shareholder, you can deduct the amount you paid during the year for health insurance for yourself, your spouse/civil union partner or domestic partner, and your dependents. Your deduction cannot be more than the amount of your earned income, as defined for federal tax purposes, from the business under which the insurance plan was established.
  
  
• Property Tax Deduction/Credit
  If you were a New Jersey homeowners or tenants, you may qualify for either a property tax deduction or a refundable property tax credit. More information is available on the  credit/deduction.
  
  
• Qualified Conservation Contributions
  You can deduct any contribution you made for conservation purposes of a qualified real property interest in property located in New Jersey. The deduction is the amount of the contribution allowed as a deduction in calculating your taxable income for federal purposes.
  
  
• Health Enterprise Zone Deduction
  If you provide primary care services in a qualified medical or dental practice you own that is located in or within five miles of a designated Health Enterprise Zone (HEZ), you may be able to deduct a percentage of the net income from that practice. Partners and S corporation shareholders of a qualified practice enter the HEZ deduction amount listed on Schedule NJK-1, Form NJ-1065, or Schedule NJ-K-1, Form CBT-100S. Sole proprietors must calculate the amount of their HEZ deduction. See Technical Bulletin TB-56 , Health Enterprise Zones, for eligibility requirements and how to calculate the HEZ deduction.
  
  
• Alternative Business Calculation Adjustment
  If you have losses in certain business-related categories of income, you may be able to use those losses to calculate an adjustment to your taxable income. In addition, you can carry forward unused losses in those categories for up to 20 years to calculate future adjustments. The categories of income that are included in the adjustment calculation are: net profits from business; net gains or net income from rents, royalties, patents, and copyrights; distributive share of partnership income; and net pro rata share of S corporation income. Complete Schedules NJ-BUS-1 and NJ-BUS-2 to calculate the amount of the adjustment or loss carryforward.

[Ron96]

If the investment advisory fees are for IRA accounts (both rollover and Roth) are they still deductible for California income tax?  If so, can the fees for the rollover IRA be paid directly from that account, or do they need to be paid from dollars that have already been taxed?  Since the Roth was created with after-tax dollars, could the investment advisory fees be paid directly from that account and still be deductible for California income tax? Thank you!

[RobertB4444]

As long as the fees are paid with post tax dollars then they are deductible.  Fees paid from within tax advantaged accounts (even Roths) do not count.

[Ron96]

 I appreciate you taking the time to respond.  This is extremely helpful.  Thank you so much!!

[Mr_Crabs]

What about for 2021 CA state taxes? And if advisor fees are still deductible for CA, where do I enter the fees in TT?

[ErnieS0]

Enter your investment fees in Deductions & Credits @Mr_Crabs. TurboTax will carry them over to your California return.

Here's where to go:

1. Tap Federal in the left column
2. Then Deductions & Credits at the top
3. Scroll down to Other Deductions and Credits
4. Start Other Deductible Expenses
5. Say Yes/No to Did you pay any generation-skipping taxes in 2021?
6. Say Yes on Did you have any of these less common expenses?
7. Enter a Description and Amount