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emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2664
Experience:  IRS licensed Enrolled Agent and tax instructor
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I have a question about schedule C, Legal and professional

Customer Question

JA: Hi. What is your issue regarding?
Customer: I have a question about schedule C
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: Legal and professional fees
JA: Is there anything else the Accountant should be aware of?
Customer: I have software fees for tax preparation. Should that be on line 17 of schedule C?
Submitted: 5 months ago.
Category: Tax
Expert:  emc011075 replied 5 months ago.

Hi. My name is ***** ***** I will be happy to help you.

Tax preparation fees are normally deducted on Schedule A. You can allocate a portion of the fees on Schedule C, depending on complexity of your return and Schedule C. If your primary source of income is from your small business, I would allocate between 50 - 75% of the fees to Schedule C and rest to Schedule A. You can deduct it as legal and professional or as tax preparation fees in section V - Other expenses.

Customer: replied 5 months ago.
This is actually for my homework so I just want to make sure is it on line 17 or other expenses?
Expert:  emc011075 replied 5 months ago.

It could be both, depending who prepares your tax return, both ways are acceptable.

According to Schedule C instructions, line 17:

Include on this line fees charged by accountants and attorneys that are ordinary and necessary expenses directly related to operating your business. Include fees for tax advice related to your business and for preparation of the tax forms related to your business. Also include expenses incurred in resolving asserted tax deficiencies related to your business.

If it is for homework, go with line 17.

Expert:  emc011075 replied 5 months ago.

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?

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