Can a person without a business or investment income claim the cost of tax preparation on their return
Q.We seem to have a few experts here finally. How about taking a crack at this. Can a person without a business or investment income claim the cost of tax preparation on their return. Most national firms claim it for everyone.
A.Tax preparation is not deductible since it does not relate to any income source. Doesn't make it legitimate. Just because you have business or investment income doesn't mean that tax preparation is related to making that income. If, for example, someone had investment income, of any kind, on the, say 2005 tax return, then IF the person paid prep fees in ****2005**** I put the fees down as "Preparation of Investment Statement*, i.e. Schedule 4. Never had it challenged...YET. Self-employed, commissioned salespeople, farmers..those are some OTHERS who can legally claim prep fees. No way, I state, can most others LEGALLY claim prep fees. Yes that person can claim the cost of tax preparation. Of course,technically, if all you have is a T4 slip, then you should *not* be doing it. The reality is, however, that most accountants deduct tax prep fees regardless of source of income. Sure, if the person has income from a business or property we will deduct it on the T2124/2042/etc or T776. Otherwise, it goes on schedule 4. Went to a seminar a couple of years ago and the speaker asked the audience how many of us deduct tax prep fees even if there is no investment/business/property income. Virtually all of us put up our hand (which was probably about 400 accountants - talk about boring). So there you go: technically no, but practically yes. I hope this doesn't turn into the CCA thread above.
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