Discussion:Preparer's Fees
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Discussion Forum Index --> Tax Questions --> Preparer's Fees
| 24 February 2007 | |
| Hope someone will be able to help me out with this question. While looking through last years return I noticed that our tax man wrote in fees of $150.00 for tax preparation fees. Yet we paid him $300.00 for the service and we have the receipt from him showing this. Are we able to right off the remainder of this fee this year even if we do not have him do our taxes for us. Or will we need to file an ammended return for last year's taxes in order to get this deduction. Please advise. Thanks! ~Liz~ | |
| 24 February 2007 | |
| The amount on your 2005 tax return would have represented what you paid him in 2005 to prepare your 2004 tax return. Also, if there are businesses or rental schedules part of the fee might be deducted there. | |
| 24 February 2007 | |
| Where on your tax return is the $150 reported?
When did you pay the $300 to the preparer? Did you have a Schedule C for self-employment income, or any kind of partnership income? | |
| 24 February 2007 | |
| Liz, you don't give us enough information, but it looks like you had self-employed income or rental income and the $150 is the portion of your tax return specifically allocated to your business or rental.
If you didn't have a business or rental then your tax preparation fee goes in the itemized deductions form (schedule A). There is a 2% of AGI floor. That means that if you add up all the expenses that go in that section, the first 2% of your adjusted gross income is not deductible. In most cases it doesn't make much difference. So it may not even worth to do an amended return. | |
| 24 February 2007 | |
| Are you saying that the INVOICE your preparer gave you, after preparing your 2005 return, is for $150, but that you actually paid him $300? I'd say there was an error on his invoice last year, if that were the case ... or you somehow paid him twice what he wanted and expected.
On the other hand, if you are saying that you found the $150 listed somewhere INSIDE the tax return, then it must pertain to what you paid for your 2004 tax return. For example, if the $150 figure is on Schedule A, that's perhaps all you paid in 2004. But if you have a business, or rental properties, you might find part of his fees reflected on your schedule C or E (the portion used to pay for your business-related tax forms). Did your affairs become a good deal more complicated between 2004 and 2005 (e.g., bought a house, started a business, etc.)? That might explain why his price seemingly doubled between those years. | |
| 24 February 2007 | |
| Wow! You all are fast at your replys....
Sorry for not giving you enough information. Maybe I can explain better. In 2004 we did pay him $150 for doing our taxes. Form 1040,& Schedule A,and State. As my husband is an Over the Road Truck Driver. In 2005 we paid him $300.00 (On the invoice) as there was a Schedule C added to this for self employment. This is on Schedule A under Tax Preparation fees on both 2004 & 2005 returns.. So I guess my question would be, are the tax papers that were prepared for 2004 tax return at a cost of $150.00 actual deducted in,or on our 2005 tax return? And if yes, then the fee's we paid in 2005 would be a deduction for our 2006 tax return correct???? Or maybe not..... Thanks again. ~Liz~ | |
| February 24, 2007 | |
| Look on the Sch C under Legal & Professional for the other $150. No, the fees you paid in 2005 were to prepare your 2004 returns and are deductible on the 2005 return (in the year you paid the fees). | |
| February 24, 2007 | |
| The fee you paid in 2006 was for your 2005 return and is deductible on the 2006 return. | |
