If you’re wondering, “Are tax filing fees deductible?” you’re not alone. Many taxpayers, especially those repaying back taxes or on an IRS payment plan, want to know if they can deduct the cost of preparing and filing their taxes. While the IRS allows some deductions for tax preparation, the rules can be tricky depending on your financial situation. Let’s break down what you need to know and how Curler Accounting can help clarify your options.

What Are Tax Filing Fees?

Tax filing fees include the cost of preparing your income tax returns, either by hiring a certified public accountant (CPA), using tax software, or engaging a tax preparation service like Curler Accounting & Tax Services, LLC. These fees can quickly add up, especially for individuals with complex financial situations, small businesses, or those facing back tax issues.

Typical Tax Filing Costs

The fees can vary widely:

– Basic individual returns: $150 to $400

– Itemized returns: $200 to $800

– Small business tax returns (like Schedule C): $500 to $1,200 or more

– State filings: Additional costs on top of federal returns

Given these figures, it’s no surprise that taxpayers want to know if these expenses can reduce their overall tax liability through deductions.

Are Tax Filing Fees Still Deductible?

In short, it depends. Prior to the Tax Cuts and Jobs Act (TCJA) of 2017, individuals could deduct tax preparation fees as a miscellaneous itemized deduction if they exceeded 2% of adjusted gross income (AGI). However, this deduction was eliminated from 2018 through at least 2025. That means most individuals can no longer deduct these expenses on their personal tax returns.

Exceptions for Businesses and Self-Employed Individuals

Good news for business owners and the self-employed: tax filing fees may still be deductible if they are considered ordinary and necessary business expenses. If you’re self-employed, a freelancer, or run a small business, these fees can be claimed on Schedule C as a business expense. Curler Accounting specializes in helping business owners in Mequon, Washington County, and surrounding areas determine what qualifies as a valid deduction.

How It Works for Businesses

If your tax preparation expenses are directly related to filing business tax returns, including bookkeeping and payroll reports, those costs are generally deductible. This may include:

– Fees paid to professionals like Matt Curler, CPA

– Costs for small business tax software

– Expenses tied to preparing business-related forms like 1099s or Schedule C

For business owners, this deduction can significantly lower taxable income and improve cash flow, particularly when paired with Curler Accounting’s customized cash flow optimization strategies.

What If You’re Paying Back Taxes or On a Payment Plan?

If you’re paying back taxes or have set up a payment plan with the IRS, you’re likely already under financial stress. You might wonder whether the fees for getting help with tax filings or resolving tax debt are deductible. The answer is nuanced.

Tax Preparation Costs Related to Back Taxes

Generally, fees for preparing past-due returns are treated the same way as current-year returns. That means individuals cannot deduct them, but they may be deductible for those filing on behalf of a business. So, if you’re a sole proprietor or small business owner resolving past tax issues, there’s a chance you can deduct fees connected to filing back taxes for your enterprise.

What About IRS Payment Plan Fees?

Fees you pay directly to the IRS—like setup fees for payment plans—are not tax-deductible. These are considered personal expenses and are not eligible for deduction. Likewise, penalties and interest charges for unpaid taxes are also not deductible.

However, if you work with an accountant like Matt Curler to negotiate your IRS payment plan or representation, the professional fees related to a business tax issue might be deductible. Curler Accounting offers IRS representation services that not only help reduce your stress but may offer tax deduction opportunities if you’re a business client.

How Curler Accounting Makes It Easier

At Curler Accounting & Tax Services, LLC, we believe that navigating tax laws shouldn’t be a burden. Whether you’re grappling with back taxes, attempting to establish a payment plan with the IRS, or simply trying to file your taxes correctly and efficiently, we offer personalized support every step of the way. Based in Mequon and serving clients across Wisconsin, Matt Curler and his team provide tax solutions rooted in over two decades of experience.

Comprehensive Tax Preparation and Planning

Our tax preparation services go beyond just filling out forms. We:

– Evaluate your eligibility for every legal deduction

– Determine if your filing fees or other costs are business-related

– Guide sole proprietors and LLCs on deducting business tax preparation

– Assist those on payment plans manage and resolve tax debt responsibly

Personalized Support with Integrity

Matt Curler’s background—18 years in the Wisconsin Army National Guard, followed by a law enforcement career and roles at KPMG and Harley-Davidson—brings unparalleled discipline and precision to every client interaction. Whether you’re an individual facing IRS issues or a small business seeking compliance support, you will receive the same high level of detail and commitment that has earned Curler Accounting a trusted reputation in the community.

Tips to Maximize Deductible Tax Filing Costs

Here are some practical ways to ensure your tax-related expenses have the highest chance of being deductible:

– Keep clear records of all tax preparation fees and services paid for the year

– Separate personal and business tax services on invoices

– Consult a pro like Curler Accounting to confirm validity of business deductions

– Use accounting software or services that categorize expenses properly

– Address old tax returns as soon as possible; deduct eligibility declines over time

Being strategic about your tax filing can lead to meaningful savings. The key is knowing the difference between personal and business expenses—and having the right accounting team in place to guide you.

FAQs: Are Tax Filing Fees Deductible?

Can I deduct tax software costs?

If used for business purposes, yes. If you’re a business owner or freelancer using software to prepare your business taxes, you can usually deduct the cost as a business expense.

What if I use Curler Accounting for both personal and business tax filing?

Split invoices or billing statements showing the breakdown between personal and business services may allow you to claim the portion related to your business. Matt Curler can help you properly structure those services for compliance and deduction tracking.

Do I need to itemize deductions to claim filing fee deductions?

That depends. Since the 2018 tax law changes, most individuals take the standard deduction, which excludes the former 2% miscellaneous deductions that included tax prep fees. However, businesses deduct these costs directly on their return without itemization.

Are penalties or interest on taxes deductible?

No, penalties and interest assessed by the IRS are not tax-deductible, regardless of whether you’re an individual or business. Curler Accounting can help you develop strategies to avoid or minimize these fees in the future.

Can back tax professionals like Curler Accounting help reduce my future tax liability?

Yes. By accurately filing returns, resolving issues with the IRS, and implementing forward-looking tax strategies, Curler Accounting can help reduce your chances of accruing back taxes again. This proactive approach often leads to savings and peace of mind.

Planning Ahead for Next Year

Even if you can’t deduct tax filing fees this year due to personal filing status, planning ahead with Curler Accounting ensures better eligibility in future years. Whether that means setting up a small business entity, optimizing income streams, or tracking expenses more clearly, Curler Accounting offers tailored strategies to improve your tax profile long-term.

Are tax filing fees deductible? For individuals, not typically. For businesses and self-employed taxpayers—absolutely. And the distinction could save you hundreds or even thousands of dollars each year.

Don’t let confusing tax rules hold you back. If you’re dealing with back taxes, on a payment plan, or just want trustworthy and ethical tax support, Curler Accounting & Tax Services, LLC is here for you. Let Matt Curler and his team navigate the tax landscape with you, providing personalized support, smart strategies, and peace of mind. Serving Washington County, Mequon, and clients throughout Wisconsin virtually, Curler Accounting combines professional insight with a community-first approach. Schedule a consultation today and turn your tax filing into a financial advantage.