Sometimes Overlooked Investment Expenses Deductions

Many people do not realize that small things, like buying stationary for the record keeping of their stocks or shares as well as the short calls on their telephone bill, can all be written off as investment expenses. Anything that helps them maintain and grow their investments is part of their "miscellaneous" investment expenses.

Many years ago, people used to take trips to all parts of the country to attend investment seminars and be able to deduct the expenses incurred. These investment-traveling expenses, however, are no longer deductible. Not even a single part of it is deductible any longer. Even though business trips are considered deductible when it comes to taxes, the ones involving investment seminars are no longer.

Still, things like buying books to better your client's investment skills, making trips to their stockbroker's office, trade papers, and safe deposit boxes that contain documentation related to their investment, are still deductible. In addition, any investment fees, custodial fees, trust administration fees, and other expenses they paid to maintain their investment is tax deductible. In the case of the safe deposit box, they can not also use it to store jewelry and other personal papers as well as investment documentation. If they do, the cost of it is no longer tax deductible.

Service charges your client pays for dividend reinvestment plans are also tax deductible. This may include payments for keeping shares they bought through a plan, collection of and reinvestment of their cash dividends, and for record keeping.

In keeping up with the electronic age, the fees that they pay to maintain their account on on-line stock broking houses, such as Etrade or Ameritrade, are tax deductible. The only aspect of investing that was never tax deductible and still is not, either online or offline, is the commission that they pay to the broker. Instead, commissions paid are considered part of the investment's basis, thus helping your client reduce the capital gains tax that would normally apply when they sell part of their stocks.