Can I Deduct Investment Advisory Fees?
When it comes to tax deductions, understanding the eligibility of investment advisory fees is crucial for taxpayers.
As of the changes introduced by the Tax Cuts and Jobs Act (TCJA) enacted in December 2017, most miscellaneous itemized deductions were eliminated for the tax years 2018 through 2025. This includes investment advisory fees that previously could be deducted as an unreimbursed employee expense or as an investment expense if they exceed 2% of your adjusted gross income (AGI).
However, if you are a business owner or operate a trade or business, you may still be able to deduct certain fees related to the management of your investments. For example, fees paid for investment management services regarding a business account are potentially deductible, so long as they are ordinary and necessary expenses related to the business.
It's essential to keep accurate records of all fees and consult with a tax professional to determine your specific situation, especially if your investment management relates to a business. Always stay informed on tax law changes that might affect your eligibility to deduct these fees in future tax years.
In summary, while individual taxpayers cannot currently deduct investment advisory fees, there may be exceptions for business-related expenses.