* As of 1/1/2018 the following information is no longer valid. You can no longer take these expenses as Itemized Deductions per TCJA.
These are fees that your financial advisor charges to maintain your account. They are an investment expense as an Itemized Deduction.
Miscellaneous itemized deductions are generally limited to the amount of expenses over and above 2% of your adjusted gross income (AGI). In other words, there’s a floor below which you lose the ability to deduct.
For example: Say your AGI is $75,000 and you have $3,000 in miscellaneous itemized deductions. Your 2% AGI floor is therefore $1,500 (2% of $75,000). You lose the first $1,500 of the $3,000 you claim, but get to deduct the remaining $1,500.
Here’s a list of investment-related expenses that you may be able to deduct:
- Fees for investment counsel and advice, including subscriptions to financial publications
- IRA or Keogh custodial fees, if paid by cash outside the account
- Software or online services used to manage your investments
- Safe deposit box rent, if used the box to store certificates or investment-related documents
- Transportation to your broker’s or investment adviser’s office
- Attorney, accounting or clerical costs necessary to produce or collect taxable income
- Charges for automatic investment services and dividend reinvestment plans
- Costs to replace lost security certificates
Investment-related expenses that can't be deducted include:
- Trading commissions—these are "capitalized" to increase your cost basis and/or reduce your taxable sales proceeds
- Costs of traveling to attend a shareholder’s meeting
- Investment advisory fees related to tax-exempt income—you generally need to prorate these fees based on the portion of tax-exempt investment income versus total taxable investment
