Hi, I'm Miranda Chook, a CPA, and you've clicked on this because you want to know if the cost of tax preparation software is deductible or not. Well, first let's define what those fees are. They can be the fees that you pay for a CD at a store, to buy software and then you take it home and download it onto your computer. It can also be fees that you have paid for on-line and again, you download it. Now, remember, it's also not just for software, it could be tax preparation fees that you pay a person or a company to help you prepare your taxes. So all of these payments you make can, are considered tax preparation fees. Now, the decision tree goes like this. First of all, do you deduct your, itemize your deductions? If you do not, you probably cannot deduct these expenses. Now if you do, then there is a Schedule A, and on Schedule A there's a section that's called job expenses and miscellaneous expenses, and one of those expenses in that category are tax preparation fees. Now, the next part of the decision tree is that you have to calculate two percent of your adjusted gross income and compare that number to the total of all the expenses in that category, not just your tax preparation fees but all the expenses in that category, and if two percent is greater than all those expenses, then you're not going to be able to deduct it. Now, if it's less than that, then that difference will be an amount that can be included as part of your deductible expenses. So, again, this is generalized information, so please check with an experienced Financial Advisor to see how this affects your specific circumstances.