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BUND
Level 2

Can I deduct investment expenses, such as the cost of my investment advisor, on my California Income Tax return?

I am confused on how to enter my paid advisor fees as a deduction in my California tax return. 

Instructions are confusing as it asks me to either enter the number in positive or negative. I did not purchase any government bonds. 

please help. TIA!

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2 Replies
MonikaK1
Expert Alumni

Can I deduct investment expenses, such as the cost of my investment advisor, on my California Income Tax return?

Under federal law, the deduction for miscellaneous itemized deductions subject to the 2% AGI floor, such as investment expenses, is suspended. California does not conform to that change. You can enter any miscellaneous itemized deductions that are still allowable for California in the Federal section of TurboTax and they will carry over to your California return if you itemize your deductions and have enough to exceed the adjusted gross income limitation.

 

See the Instructions for California Form 540 for more information.

 

Line 19 – Unreimbursed Employee Expenses

Prepare federal Form 2106 reflecting your employee business expense using California amounts (i.e., following California law). Include your entertainment expenses, if any, on line 5 of federal Form 2106 for California purposes.

Enter the amount from line 10 of federal Form 2106 on line 19.

 

Line 20 – Tax Preparation Fees

Enter the fees you paid for preparation of your tax return, including fees paid for filing your return electronically. If you paid your tax by credit or debit card, include the convenience fee you were charged on line 21 instead of this line.

 

Line 21 – Other Expenses

Enter the total amount you paid to produce or collect taxable income and manage or protect property held for earning income.

List the type of each expense next to line 21 and enter the total of these expenses on line 21. If you are filing a paper return and you cannot fit all your expenses on the line next to line 21, attach a statement showing the type and amount of each expense.

Examples of expenses to include on line 21 are:

  • Certain legal and accounting fees.
  • Custodial fees (for example, trust account).
  • Casualty and theft losses of property used in performing services as an employee from federal Form 4684, line 32 and line 38b, or federal Form 4797, line 18a.
  • Deduction for repayment of amounts under a claim of right if $3,000 or less.

 

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BUND
Level 2

Can I deduct investment expenses, such as the cost of my investment advisor, on my California Income Tax return?

Thank you.

 

@MonikaK1 

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