What brokerage management fees are deductible?

[mtiede]

Ok, I see from last year's taxes, 2019, that I got 1099-R statements.  And had some tax withheld from those distributions.  This year, apparently because of CARES, there was no distribution, so no 1099-R.

So I think I can conclude that BOTH of those employer accounts are some sort of tax deferred plans and I can't deduct the fees (on either US or STATE forms).  Does that sound right?

[Opus 17]

@mtiede 

Yes, you would only get a 1099-R from a qualified plan.

[mtiede]

@Opus 17 In the federal tax review I'm asked, "Are you covered by a retirement plan at work?"

This question would be clear to me if they hadn't added at the end "at work".  So we are both covered by plans "from work", but we don't work anymore.  So are they just trying to ask if we have a 401k, for instance, or are they again trying to determine if we are CURRENTLY employed AND have a 401k, etc.

... time passes ...

never mind.  I went ahead and answered yes and it said we didn't qualify anyway.  But, being curious, I'm still trying to understand that "at work" part.

[Opus 17]

@mtiede 

The question of whether you are covered by a retirement at work is related to your ability to make new contributions to an IRA or a Roth IRA. You would answer no since you are not working. But, since you can only make such contributions if you have income earned from working, you can’t make new contributions anyway.

[mtiede]

Yeah, I think it all makes sense now.  Thanks everyone.

[Bud24]

I have a managed account that just subtracts the annual management fee.  This is not an IRA --just a regular taxable investment account funded with after tax money.  Where do I deduct this management fee?

[LeonardS]

Fees you pay to a broker, bank, trustee, or similar agent to collect your taxable bond interest or dividends on shares of stock are miscellaneous itemized deductions and can no longer be deducted.  Miscellaneous deductions were eliminated for tax years 2018- 2025 by the 2017 Tax Cut and Jobs Act.

[Opus 17]

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@Bud24 wrote:

I have a managed account that just subtracts the annual management fee.  This is not an IRA --just a regular taxable investment account funded with after tax money.  Where do I deduct this management fee?

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Management fees are a miscellaneous itemized deduction subject to the 2% rule.  These deductions were eliminated from federal tax returns for 2018-2025 by the 2017 TCJA.  They may be deductible in some states.  You can enter them under "other itemized deductions."  Investment expenses are on the second or third page of that interview. 

[Tonynick]

I'm struggling to understand what or if I can deduct brokerage fees? I pay quarterly automatically through my brokerage account with Morgan Stanley. This portfolio is not a retirement account. They provide the total amount with the tax statement year end. They list it as "Fees and Expenses" and break it down showing the charges every month. They title the column as an "activity" and state a "charge" for each month. They then have another column titled "description" and for each month it states i.e.  "Adv Fee 02/02 - 02/28". Are these considered deductible fees?

[Anonymous_]

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@Tonynick wrote:

Are these considered deductible fees?

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No. See the response by @Opus 17 immediately above your post.

[Opus 17]

@Tonynick 

Those fees would be miscellaneous itemized deductions subject to the 2% rule.  You can enter them in TurboTax, but they are not deductible on your federal return for 2018-2025.  If you list them in the program, they may flow to your state return if your state allows deductions.  

[Tonynick]

Thank you for the response. Does anyone know if the state of Wisconsin allows brokerage fees to be deducted?

[PattiF]

No, Wisconsin does not allow a deduction for brokerage fees.

[rpknoxjr]

Thank you. So, when I imported the financial information in TurboTax, they reflected the management fees as a deduction from the dividend gain.