How to Enter Tax Preparation Fees on a Tax Return
According to the Internal Revenue Service, as of 2011, over 80 percent of American households use a tax preparer or tax prep software. If you pay for your tax preparation, you can deduct it as a miscellaneous deduction on your income taxes, but only if you itemize your deductions. Since you have to itemize your deductions to claim your tax preparation fees, you should not claim the deduction unless your itemized deductions exceed your standard deduction. In addition, only the amount of your miscellaneous deductions exceeding 2 percent of your adjusted gross income can be deducted.
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Instructions
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Report your tax preparation costs from the previous year on line 22 of Schedule A.
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Add your tax preparation costs to any other miscellaneous deductions you claim, including unreimbursed employee expenses such as job travel and report the total on line 24.
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Enter your adjusted gross income from line 38 of your Form 1040 income tax return on line 25 of Schedule A.
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Multiply your adjusted gross income by 0.02 and report the result on line 26. For example, if your adjusted gross income equals $34,000, multiply $34,000 by 0.02 to get $680.
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Subtract 2 percent of your adjusted gross income, the amount on line 26, from your total miscellaneous deductions, including your tax preparation fees, and report the total on line 27 of Schedule A.
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Add your miscellaneous tax deductions to any other itemized deductions you claim and report the total on both line 29 of Schedule A and line 40 of Form 1040. This amount replaces your standard deduction and reduces your taxable income for the year.
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