Q. What kinds of bank fees can I deduct?
— Taxing time
A. You’re smart to look for all the deductions you can.
The answer? It depends.
Generally fees paid to a bank are not tax deductible unless they are paid in the normal course of your own business, said Gail Rosen, a Martinsville-based certified public accountant.
“If you run your own company, then all `ordinary and necessary expenses’ paid during the tax year are tax deductible,” Rosen said. “Bank fees are an `ordinary and necessary expense’ if paid for a business bank account used in your trade or business.”
If you work for someone, you can deduct unreimbursed employee business expenses as a miscellaneous itemized deduction subject to the 2 percent of Adjusted Gross Income (AGI) floor.
But, Rosen said, it would seem unusual for an employer to have you incur bank fees on behalf of the company you work for.
If you’ve paid the bank fees for investment advice, then it would be tax deductible as a miscellaneous itemized deduction, Rosen said.
And if you’re in Alternative Minimum Tax (AMT), you’ll be out of luck.
“For AMT purposes, no deduction is allowed for miscellaneous itemized deductions,” she said. “These types of expenses are only deductible for regular tax purposes only to the extent they exceed 2 percent of your adjusted gross income (AGI).”
Email your questions to moc.p1498392810leHye1498392810noMJN1498392810@ksA1498392810.