Tax preparation fees are deductible only in specific situations, and the rules changed significantly in 2017

You can deduct tax preparation fees, but only if you itemize deductions on Schedule A instead of taking the standard deduction. From 2017 through 2025, the Tax Cuts and Jobs Act suspended the deduction for most taxpayers — it was part of a broader suspension on miscellaneous itemized deductions. That suspension is set to expire after the 2025 tax year, meaning the deduction may return for 2026 returns, though Congress could extend or modify the suspension.

If you do itemize and the suspension has ended, tax preparation fees count as a miscellaneous itemized deduction. This includes fees paid to a CPA, tax attorney, enrolled agent, or tax software. It does not include fees for preparing state returns filed separately — those are deductible only if you itemize and the suspension has ended, and they must be reported on the federal return line for tax preparation fees.

Key Takeaways

  • Tax preparation fees are deductible only if you itemize deductions on Schedule A, not if you take the standard deduction.
  • From 2017 through 2025, the deduction is suspended for most taxpayers under current law, though this may change for 2026 and later years.
  • Fees paid to CPAs, tax attorneys, enrolled agents, and tax software all count as deductible tax preparation expenses when the deduction is available.
  • You report tax preparation fees on Schedule A as a miscellaneous itemized deduction, subject to any applicable limitations.

When the deduction is actually available to you

The deduction depends on two things: whether you itemize, and whether the suspension is in effect for the tax year you are filing. For 2024 returns (filed in 2025), the suspension is still in place, so the deduction is not available to most people. You would need to check current IRS guidance or a tax professional for 2025 returns and beyond, since Congress may extend, modify, or allow the suspension to expire.

Itemizing means you choose Schedule A instead of the standard deduction. The standard deduction for 2024 is $14,600 for single filers and $29,200 for married filing jointly. If your total itemized deductions would exceed that amount, itemizing saves you money. Tax preparation fees are only one piece of that calculation — you would also count mortgage interest, state and local taxes (capped at $10,000), charitable donations, and medical expenses above a certain threshold.

For most people, the standard deduction is larger, so itemizing does not make sense. That is why the suspension of the tax preparation fee deduction affects relatively few taxpayers even when it is technically available.

What counts as a deductible tax preparation fee

Deductible fees include money you pay directly for tax return preparation: CPA fees, tax attorney fees, enrolled agent fees, and tax software subscriptions. The fee must be for preparing your federal income tax return or for tax advice related to your return. Fees for bookkeeping, accounting services unrelated to tax return preparation, or financial planning do not count.

If you use tax software like TurboTax, H&R Block, or TaxAct, the cost of the software itself is deductible. If you pay for state return preparation as a separate service or add-on, that fee is also deductible on your federal return. However, you report all tax preparation fees on the federal return line — you do not split them by state.

Fees for amended returns (Form 1040-X) and extensions also count. If you pay a CPA to file an extension or prepare an amended return, that fee is deductible along with your original return preparation fee.

How to report tax preparation fees on your return

You report tax preparation fees on Schedule A, line 16 (or the current equivalent line for miscellaneous itemized deductions). You do not need to itemize the specific fees or name the preparer — you simply enter the total amount you paid for tax preparation during the year.

Keep receipts or invoices from your tax preparer or software provider. The IRS does not typically ask for proof of these expenses, but if you are audited, you will need to show documentation that you actually paid the amount you claimed. A receipt, invoice, credit card statement, or bank statement showing the payment is sufficient.

If the suspension is in effect for your tax year, you cannot claim the deduction at all, even if you itemize. The suspension applies to the entire category of miscellaneous itemized deductions, not just tax preparation fees.

State tax return preparation fees

Fees for preparing your state income tax return are deductible on your federal return if you itemize and the deduction is available. You report them on the same line as federal tax preparation fees — there is no separate line for state fees. If you pay $300 to prepare your federal return and $150 to prepare your state return, you report $450 total on Schedule A.

Some tax software charges a single fee for both federal and state returns. In that case, you can deduct the entire fee on your federal return. If the software charges separately, add both amounts together and report the total.

What happens if the suspension expires

The suspension of miscellaneous itemized deductions is set to expire after December 31, 2025, unless Congress extends it. If it expires as scheduled, tax preparation fees would become deductible again for 2026 returns and later, subject to the same rules: you must itemize, and the fee must be for tax return preparation or tax advice.

Congress has extended or modified tax provisions before, so it is possible the suspension could be extended, made permanent, or changed in some other way. Check the IRS website or consult a tax professional closer to the time you file to confirm the current rules for your tax year.

Frequently Asked Questions

Can I deduct tax preparation fees if I take the standard deduction?

No. Tax preparation fees are only deductible if you itemize deductions on Schedule A. If you take the standard deduction, you cannot deduct tax preparation fees, even if you paid them.

Is the tax preparation fee deduction available for 2024 returns?

No, not for most taxpayers. The suspension of miscellaneous itemized deductions is still in effect for 2024 returns filed in 2025. Check current IRS guidance for 2025 returns and beyond, as the suspension may expire or be extended.

Can I deduct fees I paid to a tax software company?

Yes, if you itemize and the deduction is available. The cost of tax software like TurboTax, H&R Block, or TaxAct counts as a tax preparation fee. Keep your receipt or invoice as proof of payment.

Do I need to list each tax preparation fee separately on my return?

No. You add up all tax preparation fees you paid during the year and report the total on Schedule A. You do not need to itemize individual fees or name the preparer.

What if I paid for both federal and state tax preparation?

Report the total of both on your federal return on Schedule A. There is no separate line for state fees — they go on the same line as federal preparation fees.