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10 Creative (But Legal) Tax Deductions

        Money | Taxes

1
Tax Preparation and Appraisals
Did you know you could deduct the cost of doing your taxes?
Did you know you could deduct the cost of doing your taxes?
Ronnie Kaufman/Getty Images

Even though it's hard to see it at 11:38 on the night of April 15, there is a silver lining to filing taxes: You can deduct all expenses related to the preparing and filing of taxes! Sort of... Tax preparation deductions fall under "miscellaneous itemized deductions" that are subject to the 2-percent limit. That means you can only deduct tax preparation expenses and fees that exceed 2 percent of your adjusted gross income [source: Internal Revenue Service]. Fine, it's more of a bronze lining.

Deductible expenses and fees include your accountant's fee, any software you purchased to help you prepare your taxes (Web-based services like TurboTax count), and even "how-to" books about taxes [source: Internal Revenue Service]. If we charged you for reading this article, you could deduct that, too.

Another deduction that falls under the two-percent limit has to do with appraisals. If you are donating a particularly expensive item to a charity or tax-exempt institution, the IRS requires a professional appraisal to determine its fair market value. You can't include the cost of the appraisal as a charitable contribution, but you can deduct the appraisal fee as a miscellaneous itemized deduction [source: Internal Revenue Service]. The same is true for property that is damaged in a storm. The IRS requires an appraisal to assess the extent of the "casualty loss" for tax purposes. Again, the appraisal fee is deductible.


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