Are Turbo Tax software purchases tax deductible? (2018, post-TCJA)

[olafsons]

I thought that TT was a deductible expense, but last year my husband did not seem to find a way to claim it. Just wondered if we missed some step that might make it work since we just laid out $81.44 for this year's software.

[VolvoGirl]

You can deduct the Turbo Tax cost or any tax preparation fees you actually paid in on your tax return no matter what year it is for. But it is a Misc Deduction and only the amount OVER 2% of your AGI is deductible so it might not be worth putting it in.  So if you paid $50 in fees your income would have to be less than $2,500 to be able to deduct any of it and then only a portion of it is deductible.  And then the total of all your deductions has to be more than the standard deduction to give you any benefit.

[olafsons]

Thanks for this extra clarification. Very helpful!

[VolvoGirl]

So to be able to deduct any of the 81.44 your income AGI would have to be LESS than $4,072.

[stephanie38128]

No

[macuser_22]

Wrong.

[noodad]

Also note that this deduction is for 2017 and earlier, not 2018. See https://www.irs.gov/pub/irs-pdf/p529.pdf

[Carl]

If you purchased and paid for TurboTax 2018, in 2019, then if it qualifies it would be a deductible expense on your 2019 return. Remember, income & expenses are reported/taxable/deductible in the tax year the monetary transaction physically occured. It flat out does not matter what tax year the transaction may have been *for*.

But for most, since itemized deductions make absolutely no difference to your tax liability until the total of all of your itemzed deductions exceed your standard deducting, itemizing really makes no sense for more than 90% of your "typical" tax filers.

[Gregor Lichtenberger]

'I am self-employed but turbo tax does not make it clear as to where I can deduct the cost to purchase the turbo tax product

[AlanT222]

Self-employed taxpayers can still write off their tax prep fees as a business expense.

You would enter your preparation fees either as a professional expense, software expense, or in the other miscellaneous expense category.  

[charjean47]

What about a person filing personal taxes but uses half of the software for several rental properties that are investments?   If a person paid $100, could the person claim $50 as an office expense/software on Schedule E for rentals.  Thanks

[MayaD]

Yes, you can deduct the $50 as an expense on Schedule E.

[noodad]

@charjean47 and @MayaD  -- Sounds like you're preparing a personal return which also includes business-related schedules, as I am (in your case, schedule E, and in my case, Schedule C). But then how are you guys able to determine what portion of the tax is to be considered business-related and which portion not.

On the one hand, I could do something like look at the current published price of TurboTax Deluxe vs. the current price of TurboTax Home & Business and take the difference, maybe? Even still, it feels a little arbitrary for me. Would it be reasonable to say that, since there's only one fee paid for the whole return but the return includes business taxes, that the entire amount would be deductible as a business expense? Does the IRS provide any guidance on this? I looked around online but what I found from the IRS was pretty vague on this subject.

[charjean47]

I am going to claim half for rentals.

[ColeenD3]

As mentioned previously, you can deduct on Schedule E, the price difference between Premier and Deluxe programs.