Remember, only the portion of your tax preparation fees related to your business—like preparing forms such as Schedule C, E, or F—is deductible. Any costs of preparing personal tax returns, standard tax deductions, or tax credits are off the table.
Legal and other professional fees are not specifically mentioned in the Code as deductible items. Therefore, a taxpayer is able to deduct these types of fees only if they qualify as “ordinary and necessary” expenses under §162 (business expenses) or §212 (expenses related to the production of income).
Are Processing Fees Tax-Deductible? The IRS recognizes merchant fees (commonly referred to as credit card fees) as an essential operating cost. So, that means that, yes, businesses can claim the merchant processing fees they accrued in 2023 as a tax-deductible expense.
Yes, exam fees for professional certifications, including the CPA exam, can be tax-deductible if they are required to maintain or improve skills in your current job. However, certain conditions and limitations may apply, so it's advisable to consult a tax professional for specific guidance.
Even though CPA Review courses are not tax-deductible, it is still a good idea to use one if you plan on sitting for the CPA Exam. Overall, you end up saving money when using a CPA Review course.
You can also claim the credit for continuing education, certificate programs or separate classes you take to acquire or improve job skills, and it's available for an unlimited number of tax years.
Consider a Surcharge or Cash Discount Program
A cash discount program incentivizes customers to pay with cash, eliminating transaction processing fees. Alternatively, adding a small surcharge to credit card payments can help cover the cost of processing without impacting your margins.
Special assessments are typically charged by the HOA to cover unforeseen situations or emergencies. This could be the result of a disaster or some other cause that is not covered by insurance or an HOA's reserve fund. If the special assessment is used for repairs or maintenance, it is normally tax-deductible.
Legal and professional services
You can deduct all costs associated with hiring professionals for your business. This includes accountants, lawyers, financial advisors, marketing agencies, production logistics, etc.
To qualify for the deduction, the dues paid must be essential for maintaining or obtaining professional standing and there must be a connection between the association to which the dues are paid and employment. In addition, not all costs associated with annual membership fees are deductible.
Professional Fees & Dues:
Dues paid to professional societies related to your profession are deductible. However, the costs of initial admission fees paid for membership in certain organizations or social clubs are considered capital expenses.
return for estates and trusts, tax preparation fees attributable to a trust would be deductible under section 67(e)(1).
You may deduct as an itemized deduction, state and local income taxes withheld from your wages during the year (as reported on your Form W-2, Wage and Tax Statement) and estimated state and local income taxes and prior years' state and local income taxes paid during the year.
These fees are considered to be ordinary and necessary expenses directly associated with the operation of your business. When you accept credit card payments from customers, you can deduct the fees charged by the payment processor or merchant services provider, reducing your taxable income and increasing tax savings.
Do processors return fees when I give a customer a refund? Some do, some don't. In the open market, there's no requirement that processors return the processing fees on refund transactions.
They are usually reported as a separate line item under selling, general, and administrative expenses (SG&A), or as part of cost of goods sold (COGS) if they are directly related to the sales revenue.
According to the IRS, "unless you're self-employed, tax preparation fees are no longer deductible in tax years 2018 through 2025 due to the Tax Cuts and Jobs Act (TCJA) that Congress signed into law on December 22, 2017. Self-employed taxpayers can still write off their tax prep fees as a business expense."
For 2024, the additional standard deduction amounts for taxpayers who are 65 and older or blind are: $1,950 for Single or Head of Household (increase of $100) $1,550 for married taxpayers or Qualifying Surviving Spouse (increase of $50)
The Internal Revenue Service allows you to deduct any dues that are required by your profession, such as bar dues or membership fees to a professional or trade organization, from your taxes. If you are self-employed, you may take the full deduction.
While license fees and renewals are generally deductible, there may be certain limitations or requirements that need to be met in order to qualify for the deduction. For example, the IRS may require agents to keep detailed records and receipts of their license fees and renewals to substantiate the deduction.
Self-employed taxpayers may deduct the cost of having an accountant or other tax professional complete the business portion of their tax returns—Schedule C and other business tax forms—but they can't deduct the time the preparer spends on the personal part of their returns.