Financial Category, chose Schedule A but item does not appear in Tax Schedule Report
Ken W.
Member ✭✭
Using Quicken Mac 2017, 4.6.8. Need to deduct my Financial Advisor fee on my tax return. In Category I've chosen Financial -> Financial Advisor -> Schedule A -> Investment Management Expenses. When I produce a Tax Schedule Report the Financial Advisor fees do not appear the the Report. I've triple-checked everything and yet cannot get the Financial Advisor Fees to appear. Help! I need this to prepare my 2017 Tax Return.
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That said, I don't think you can deduct financial advisor fees paid directly out of an IRA. Reason: you are paying with pre-tax dollars, so those dollars will never end up getting taxed. The way my financial advisor explained it, I could pay the fees from my checking account and deduct them, maybe getting some benefit after deduction limitations, alternative minimum tax, etc. OR, I could pay them out of the IRA with pre-tax dollars, avoiding 100% of the tax on those dollars forever, but not being allowed to deduct them.
So, you may want to check with your financial or tax advisor on this.
There is a work-around in which one pays the fees using funds from an outside (not tax deferred) source.
See this link: https://ttlc.intuit.com/questions/1900339-can-i-deduct-ira-management-fees
As always, check with you professional tax advisor. Advice given here is worth exactly what you paid for it - zip - nada - nothing!!
Quicken user since 1991
Management fees paid through the IRA account cannot be deducted. They simply reduce the value of your IRA.
On the other hand, management fees paid by cash or check and are not deducted from the IRA can be deducted as investment expenses.
Even if not deductible, you might still want to have them paid directly from the IRA. As I tried (not very well, I guess) to explain above... by paying them from the IRA, you avoid tax on that money altogether. If you pay them from outside-IRA funds, you only get a deduction. Generally speaking, avoiding tax on X dollars altogether beats getting a deduction of those dollars.
There may be exceptions, so as JM says, consult your tax advisor.
The only question I have now is will Quicken 2017 be updated to reflect the new tax laws?
One final question: How do I mark this thread as SOLVED?
Thus, Quicken 2017's Tax Planner only works for tax years 2016 and 2017.
So no...Quicken 2017 will NOT be updated to reflect the new tax laws.
If you want the current tax year, you'll need to upgrade to the subscription Quicken. And since it's a subscription if you purchase a 2 year or 27 month subscription now, you'll get the Tax Planner to work for 2017, 2018, eventually 2019 and 2020.
https://www.fool.com/taxes/2017/12/24...
So, Ken, that makes taking the fees directly out of the IRA the definite choice. (Your advisor is wrong if he says it doesn't matter.) Think of it... Say you have $1000 in investment advise fees this year. You pay it directly out of the IRA. The money in that IRA has not yet been taxed. So that $1000 you pay out of the IRA will never, ever be taxed.
On the other hand, if you pay the $1000 out of your pocket, you will have already paid taxes on that money. And there is no longer any deduction to offset those paid taxes. The $1000 that you didn't pay from the IRA eventually gets taxed when you withdraw it.
Bottom line, paying the fees directly from the IRA avoids taxation of that money.