Are Investment / Advisory fees entered on Form 1040? If so where? (2024)

FAQs

Where do I report advisory fees on 1040? ›

The place to input the investment management fee for the taxable portion of your account is under the Federal area Deductions and Credits. Way down at the bottom under Other Deductions and Credits, enter it as Other Deductible Expenses, not as Tax Preparation Fees.

Investment management fees paid in taxable accounts (such as single, joint or living trust accounts) are a tax deductible expense and reported as a miscellaneous itemized deduction on Schedule A of Form 1040.

No, they aren't. At least not anymore. The Tax Cuts and Jobs Act (TCJA) of 2017 put an end to the deductibility of financial advisor fees, as well as a number of other itemized deductions. As of January 2018, these fees no longer contribute to reducing your tax bill.

To actually claim the deduction for investment interest expenses, you must itemize your deductions. Investment interest goes on Schedule A, under "Interest You Paid." You may also have to file Form 4952, which provides details about your deduction.

Fees in a registered account

Advisory and other investment fees charged on registered assets, regardless of the investments held, are not tax deductible. However, you have the option to pay the investment fees charged on a registered account from the registered account itself or from outside the account.

The Short Answer: Currently, the majority of miscellaneous itemized deductions, such as IRA management fees, cannot be deducted on your personal tax return for 2023. Due to the Tax Cuts and Jobs Act (TCJA) that was enacted into law by Congress on December 22, 2017, other IRA management fees are not deductible.

Financial advice that is not tax deductible

Fees paid for initial investment advice or general financial advice are typically not tax deductible. These fees are considered to have not yet contributed to your assessable income (annual taxable income).

For example, under California and New York law, investment advisory fees continue to be fully deductible for state income tax purposes.

While financial advisor fees are no longer deductible, there are things you can do to keep your tax bill as low as possible. For example, those strategies include: Utilizing tax-advantaged accounts, such as a 401(k) or IRA to invest.

Are advisory fees on 1099? ›

No. Miscellaneous deductions like financial advisor fees subject to the 2% floor were eliminated as a federal deduction by the tax laws that changed for 2018 and beyond.

For example, under California and New York law, investment advisory fees continue to be fully deductible for state income tax purposes.