Since June I have been buying and selling stocks for supplemental income. I was wondering if I could deduct the cost of charting/educational services from my taxes.

[chadfjeldhiem]

I would really like to use this service as since I have started the trial it has helped my gains.  The difficult part is its expensive(150/month).  If I could write off even a piece of that amount it would help keep that tool. Thank you.

[TomYoung · Accepted solution]

I would think that you could deduct the service under the rubric of investment advice, investment-related publications, or software or online services used to manage your investments.  This would be a miscellaneous itemized deduction subject to the 2% of AGI threshold on Schedule A line 23 so, depending on your AGI, you might not get any benefit at all.

Tom Young

[chadfjeldhiem]

Good info, so if I make 100k a year from my day job I could deduct up to 2k correct?

[TomYoung]

It hinges on your AGI, not your day job.  But if $100K was your AGI them 2% of $100K is $2,000 which is a THRESHOLD you need to get over in order to have any deduction.  Since $150 x 12 = $1,800 you'd get no actual deduction since $2K > $1.8K.

[chadfjeldhiem]

Ok that makes sense I did some more Google work and found that the best way to find the AGI is on my past tax return. Found my value. So, for future reference(next year) I should increase my 401k to decrease that value, and then if amount spent is greater than 2% of the AGI I can deduct the full amount spent on education, professional help, and charting service? I really appreciate your time. Sorry for asking so many questions and being tax incompetent.

[TomYoung]

I'm not sure you've got it.  Let's say your AGI is $80K.  $80K x 2% = $1,600.  That's the threshold you you have to get over and only the amount OVER the threshold is deductible.  So $1,800 - $1,600 = $200.   $200 is your deduction.

[chadfjeldhiem]

Thank you for breaking it down. I understand now. Essentially you have to spend a over the 2% threshold of the AGI and once you get over that point you deduct the difference. Ie you need to spend a decent amount of $$$ to recuperate anything. I was wondering if there is a phone number to call to have a conversation about a couple other topics. This process seems inefficient for both of us.
Thank you again