Tax time can be stressful, especially if you’re self-employed and managing your own finances. One common question many entrepreneurs and freelancers ask is, “Are tax filing fees deductible?” The short answer is yes, but there are some important details to consider. As a self-employed individual, you may be eligible to deduct a variety of tax-related expenses that help reduce your overall taxable income.

At Curler Accounting, we specialize in helping small business owners and freelancers in Washington County, Mequon, and beyond maximize their deductions and stay IRS-compliant. Our personalized approach ensures that you take advantage of every deduction available to you. By working with a knowledgeable accountant, you can avoid missing out on valuable deductions that might otherwise go unnoticed.

Are Tax Filing Fees Deductible?

Tax Preparation Fees for the Self-Employed

If you’re self-employed, the IRS allows you to deduct tax preparation fees as a business expense. This includes the cost of hiring a CPA, paying for tax preparation software, or even getting advice from a tax consultant. These expenses fall under the category of “ordinary and necessary” business expenses, making them deductible when filing your business tax return.

Tax laws can be complex, and taking the time to understand which expenses qualify can save you a lot of money in the long run. Many freelancers and business owners find that professional tax assistance ensures accuracy in their filings while also helping them identify deductions they might have overlooked.

How to Deduct Tax Filing Fees

To properly claim tax preparation fees as a deduction, you’ll need to report them on your Schedule C (Profit or Loss from Business). These fees should be categorized as business expenses. For those who operate as an LLC or S-Corp, the deduction may be reported on your business tax return. At Curler Accounting, we can help you navigate this process efficiently and make sure your deductions comply with tax regulations.

One of the key benefits of deducting these fees is that it can directly reduce your taxable income. This can be especially helpful for self-employed individuals who are responsible for their own taxes, as reducing taxable income can lower overall tax liability. Keeping detailed records of all tax-related expenses throughout the year makes filing easier and ensures you maximize your allowable deductions.

Other Tax-Related Expenses You Can Deduct

Accounting and Bookkeeping Services

Hiring a professional accountant to manage your books isn’t just a convenience—it can also be a write-off. If you use Curler Accounting for bookkeeping or financial consulting services, those costs can generally be deducted as business expenses.

Effective bookkeeping is essential for maintaining accurate financial records, which can help you avoid costly errors and IRS audits. Whether you manage your finances yourself or hire a professional, keeping well-organized records is key to ensuring smooth tax preparation and compliance.

Payroll Processing Fees

If you have employees or pay yourself through payroll, any fees associated with payroll services are deductible. This includes payments to payroll providers, direct deposit fees, and software costs.

Business owners who manage payroll manually often find that automated payroll services save them a significant amount of time. Being able to deduct these payroll-related costs means you can invest in efficient systems without worrying about additional expenditures.

Tax Advice and Consultation

Any fees paid to a tax professional for advice related to business operations are deductible. Whether it’s tax strategy planning or compliance guidance from experts like those at Curler Accounting, these costs can be written off on your business tax return.

Working with a professional tax consultant helps ensure that you take advantage of every tax-saving opportunity available to you. In many cases, strategic financial planning can significantly lower your overall tax burden, making the investment in expert advice well worth it.

What Tax-Related Fees You Can’t Deduct

Personal Tax Preparation Fees

While self-employed individuals can deduct tax prep fees for their business, personal tax preparation costs are no longer deductible. The 2017 Tax Cuts and Jobs Act eliminated the itemized deduction for personal tax preparation fees, so W-2 employees and retirees cannot claim these expenses.

For those who earn income through traditional employment or receive Social Security benefits, understanding how these tax law changes impact your finances is critical. Unfortunately, many individuals remain unaware that personal tax prep costs no longer qualify as a deductible expense, leading to confusion when filing.

IRS Penalties and Interest

If you incur penalties or interest charges for late payments, filing errors, or underpayment of taxes, these costs are not deductible. To avoid such expenses, working with an experienced accountant like Matt Curler at Curler Accounting is highly recommended.

Making sure your taxes are filed accurately and on time can help you avoid unnecessary penalties. Working with a professional accountant is one of the best ways to ensure that your financial records remain in good standing and that any potential tax liabilities are addressed before they become issues.

Estimated Tax Payments

As a self-employed individual, you’re responsible for making quarterly estimated tax payments. However, these payments to the IRS or state tax agencies are not considered deductible business expenses.

Planning ahead for tax payments can prevent financial strain later in the year. One way to stay prepared is by working with Curler Accounting to develop a tax payment plan that helps you meet deadlines while maintaining healthy cash flow for your business.

Maximizing Your Tax Deductions

Keep Accurate Records

Proper record-keeping is crucial to ensuring you maximize deductions and claim tax filing fees correctly. Save all receipts and invoices related to tax preparation, accounting, and payroll services. Using bookkeeping software or working with Curler Accounting can help keep your financial records organized.

Without organized records, tracking deductible expenses can become overwhelming. Investing in accounting software or professional bookkeeping services can help streamline business operations and ensure that you never miss out on valuable deductions.

Work With a Tax Professional

Tax laws change frequently, and deductions can be complex. Consulting with a CPA like Matt Curler ensures you take full advantage of applicable deductions while avoiding costly IRS issues. Curler Accounting provides customized tax planning strategies tailored to self-employed business owners.

Hiring a tax professional may seem like an added expense, but it is an investment that can yield significant financial benefits. Avoiding tax errors and maximizing deductions can save you more money in the long run than what you might pay for a consultation.

Choose the Right Business Structure

Your tax liability can vary depending on whether you operate as a sole proprietorship, LLC, or S-Corp. Working with an expert to determine the best business entity for your needs can help you optimize your deductions and tax savings.

Each business structure comes with specific tax advantages and obligations. Seeking professional tax advice before setting up your business can help you choose the structure that best fits your financial goals and operational requirements.

Curler Accounting & Tax Services, LLC, led by experienced CPA Matt Curler, specializes in tax preparation, bookkeeping, payroll solutions, and financial consulting for self-employed individuals and small businesses. With over 20 years of industry experience and a background in finance, treasury management, and tax strategy, Matt provides personalized tax guidance to clients in Washington County, Mequon, and beyond.

As a veteran of the Wisconsin Army National Guard and former Milwaukee Police Officer, Matt applies discipline, integrity, and attention to detail in his accounting approach. His strong expertise in small business tax compliance makes Curler Accounting the go-to firm for entrepreneurs looking to reduce their tax burden legally and efficiently.

Whether you need assistance with tax planning, bookkeeping, IRS representation, or choosing the right business structure, Curler Accounting can help streamline your financial management so you can focus on growing your business.

Final Thoughts

So, are tax filing fees deductible? If you’re self-employed, the answer is yes! Business-related tax preparation costs, including CPA fees and tax software, can be deducted, helping you lower your taxable income. However, personal tax prep fees and IRS penalties are not deductible. To ensure you maximize your deductions and reduce stress at tax time, consider working with a trusted professional like Matt Curler at Curler Accounting.

If you’re looking for expert tax guidance tailored to your business, contact Curler Accounting today for personalized assistance. Making smart tax decisions now can lead to significant savings in the long run.