When are financial advisor fees deductible?

Forum|Forum|7 years ago
June 7, 2019
2 replies
10 views

Financial advisor fees were withdrawn from my investments in 2016, however I didn't draw any taxable income from these investments. Are the advisor fees deductible and if not can they be carried forward?

TurboTax Premier Windows

VolvoGirl

Level 15

Depends what kind of accounts they were from.

If you paid investment expenses like safe deposit box fees or advisor fees you can deduct the amount OVER 2% of your AGI as an investment expense if you itemize deductions.  Go to……
Federal Taxes
Deductions and Credits
Choose Explore on my own or I'll choose what to work on  (if it comes up)
Then scroll down to Retirement and Investments
Other Investment Expenses - Click the Start or Update button

But if it is for a 401k or IRA account you can only deduct it if you paid it with money from outside of the account.

If the deduction is taken out of your IRA balance, it's not deductible.  If it's billed separately to you and you pay it with your own funds, it's deductible as a miscellaneous deduction on Schedule A. And then only the amount over 2% of your AGI is deductible and then only if all your deductions are more than the Standard Deduction.

rick-randall

Level 2

What is the "Standard Deduction"?

CatinaT1

Level 15

No, this is no longer a deductible item.

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jtax

Level 10

For authority showing the deductions are no longer allowed see page 7 of https://www.irs.gov/pub/irs-pdf/p5307.pdf

which says (emphasis added)

Miscellaneous itemized deductions suspended.

The previous deduction for job-related expenses or other miscellaneous itemized deductions that exceeded
2 percent of your adjusted gross income is suspended. This includes unreimbursed employee expenses such
as uniforms, union dues and the deduction for business-related meals, entertainment and travel, as well as
any deductions you may have previously been able to claim for tax preparation fees and investment expenses,
including investment management fees, safe deposit box fees and investment expenses from pass-through
entities. The business standard mileage rate cannot be used to claim an itemized deduction for unreimbursed
employee travel expenses during the suspension.
THIS MEANS THAT…if you do itemize…if your miscellaneous itemized deductions previously needed to exceed
2% of your adjusted gross income, they are no longer deductible.

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