Announcement

Collapse
No announcement yet.

Deducting tax prep fee

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Deducting tax prep fee

    My client died in Feb 2004. Her estate paid my 2003 tax prep fee in April 2004. On the 2004 Form 1040 the standard deduction was claimed. Therefore, shouldn't I claim my fee on Form 1041 as a deduction subject to 2%?

    #2
    Prep Fees

    Sounds correct to me.
    This post is for discussion purposes only and should be verified with other sources before actual use.

    Many times I post additional info on the post, Click on "message board" for updated content.

    Comment


      #3
      administrative expenses for an estate

      Small Business Quickfinder page G-5 says tax return preparation fees for the 1041 are deductible on the 1041, line14 and are not subject to the 2% AGI limitation.

      Then it says tax return preparation fees for the final 1040 are deducted as miscellaneous deductions subject to the 2% AGI limit.

      The difference is that if the expense is only incurred due to the administration of the estate, it is not subject to the 2% limit. But if the expense would be incurred regardless of whether the estate existed or not, it is subject to the 2% limit. Tax prep fees for the decedent’s 1040 would have been incurred whether or not the taxpayer passed away. So they are subject to the 2% limit. The fees to prepare the 1041 are obviously due to the taxpayer’s death. So they are not subject to the 2% limit.

      Comment


        #4
        Prep Fees

        BeesKnees, are you saying that both can be deducted on the 1041 but one is subject to 2% and the other is not?
        This post is for discussion purposes only and should be verified with other sources before actual use.

        Many times I post additional info on the post, Click on "message board" for updated content.

        Comment


          #5
          yes

          Originally posted by BOB W
          BeesKnees, are you saying that both can be deducted on the 1041 but one is subject to 2% and the other is not?
          Yes, both are deducted on the 1041 because both were paid by the estate after the death of the decedent.

          Comment

          Working...
          X