I'm a calendar-year cash-basis taxpayer.
In February 2017, I bought tax-preparation software for my 2016 return. Other deductions have already pushed me above the 2% threshold for 2016.
Do I deduct the cost of 2016 tax-prep software on the 2016 Schedule A, or do I wait and deduct it on the 2017 Schedule A, if I meet the threshold again next year? The Schedule A instructions don't address this point.
You deduct the expense in the year that you paid it. You paid for the software in 2017, so you deduct it next year on your 2017 Schedule A.
Bob Sandler
Except for a small number of special cases, all income and deductions are reported on the return for the year in which you received the income or paid the deductible expense. So if you paid for tax prep software in
2017, you deduct it on your 2017 return. It doesn't matter which year's return you prepared with the software.The most common special case referred to above is that IRA contributions, conversions, and recharacterizations can be made until April 15 of the following year.
On Sun, 12 Feb 2017 18:47:39 EST, Stan Brown wrote: [2016 tax-prep software purchased in 2017]
Thanks to Bob and Barry for your speedy answers. So I'll have to wait a year to deduct the costs of preparing my 2016 taxes. (And I bought mightily that I'll make the 2% threshold in 2017.)
I should have planned ahead and bought the software in December.
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