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Article: Tax return preparation costs are "above-the-line" deductions. (Client Report)
- Article from:
- The National Public Accountant
- Article date:
- June 1, 1992
CopyrightCOPYRIGHT 1992 National Society of Public Accountants. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Any amount paid by an individual for preparing the business portion of income tax returns and resolving tax deficiencies for a sole proprietorship, including litigation expenses, can be deducted as business expenses.
Although it is common practice for preparers to list their fees as business expenses of the client's sole proprietorship, the IRS recently had taken a hard line regarding deduction of expenses for return preparation and tax advice. A new ruling reversed that position.
In the ruling, an individual ran a consulting business as a sole proprietorship. She paid a tax return preparer $500 to prepare her Form 1040. $200 of the fee was allocable to ...