Expenses That You Can and Cannot Deduct for Investors

I signed up for tax tips from J.K. Lasser, and they sent me these tips on expenses that can and cannot be deducted for investors. See how many of these you already knew about and which ones you never knew you could deduct on your taxes:

Expenses You Can Deduct

Legal fees: If you sought legal advice regarding your investments, you can deduct those fees.
Professional fees: You can deduct fees you paid to your accountant in compensation to provide you with advice about the tax effects of certain investment transactions.
Fees for investment advice: You can deduct payments to a broker or an investment manager to manage your stocks and other investments.
Books and magazines regarding investments.
Safe deposit box fees, to the extent that you store your securities or other investment paperwork in the box.
Fees you pay directly to your IRA or Keogh custodian.
Traveling costs related to your investments, such as trips to your broker’s or investment advisor’s office and trips to look after investment property.
Home computer costs if you use the computer to manage your investment activities. You generally must depreciate the computer using the straight-line method.
Cost of software you use to manage your investments. In certain circumstances you may need to depreciate the software.
Service charges you pay as part of a dividend reinvestment plan.

Expenses You Cannot Deduct

Broker’s commissions that you pay for buying and selling securities. These affect your tax cost and the ultimate gain or loss on their eventual sale.
Fees charged by your bank for check writing.
Seminars on investments and investing strategies.
Expenses of attending a stockholders’ meeting, even if you own stock in the company and the meeting would be useful toward making further investments.
Any expenses you incur toward generating investment income that’s exempt from taxes (such as municipal bonds).

There are so many deductions out there, it’s just insane. How did our tax code get so unbelievably complex? If I had the time and patience, I am sure that I could find more than $11k in deductions to make it worth it to itemize deductions on my tax return. I guess when I accumulate more wealth and more possession later in my life, it will be worth it to pay someone to help me itemize my deductions. But, for those of you that do itemize, these are some great tips for expenses that you can deduct related to investing.

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