deducting tax return preparation...

Mar 21, 2009 1 Replies

I know income tax preparation is deductable, but my question is about when it is deductable; when it is billed, or when it is paid.



I was billed last May for my 2007 tax return, but I have not paid it. (on my lawyer's advice, don't ask...) Presumably I can't deduct it off my 2008 return since I didn't pay anything; if I pay it in 2009 can I deduct it off my 2009 return?


========================================= MODERATOR'S COMMENT: Assuming like just about every individual taxpayer you are on the cash method of accounting, the deduction is taken in the year you paid it.


That depends on your accounting method: Cash-basis accounting: When you PAY it. Accrual accounting: When it is invoiced to you.

Note that not all individuals are cash-basis. However, if the OP wasn't, he wouldn't be asking the question.

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