Professional Services (Schedule C Line 17) — United States Tax Rules

Deduct fees paid to accountants, attorneys, business coaches, and other professional advisors directly related to your business on Schedule C Line 17.

Claimable: Fully claimable · Tax authority: IRS (Internal Revenue Service)

IRS (Internal Revenue Service) Rules

• Professional fees paid for business-related advice are 100% deductible on Schedule C Line 17.
• Deductible: accountant fees for business tax preparation, bookkeeper fees, CPA consultation fees.
• Deductible: attorney fees for business contracts, trademark registration, business disputes, or reviewing agreements.
• Deductible: business coaching fees directly related to your business activities.
• NOT deductible: personal legal fees (divorce, personal injury lawsuits), personal tax advice for non-business income, general financial planning not related to your business.
• The 'directly relates to business' test applies — if an attorney drafts both a personal will and a business partnership agreement in one engagement, only the business portion is deductible.
• If a professional provides services for both personal and business matters, allocate costs appropriately.

Limits

No annual dollar cap — all ordinary and necessary professional fees directly related to your business are deductible.

Worked Example

Olivia runs a freelance consulting business. She pays: CPA for Schedule C prep $800; attorney to review a client MSA $350; business coach sessions $1,200. Total deductible professional fees: $2,350 on Schedule C Line 17.

Record Keeping

• Keep all invoices from accountants, attorneys, and business advisors
• Note the specific business purpose for each professional service engagement
• Retain engagement letters and contracts that document business-related scope
• If services are split personal/business, request itemised billing showing the business portion

Frequently Asked Questions

Can I deduct my tax preparation fees?

For self-employed individuals, the portion of tax preparation fees attributable to Schedule C (your business return) is deductible on Schedule C Line 17. Personal income tax preparation costs (for non-business income) are no longer deductible as a personal itemised deduction since TCJA 2018.

Are legal fees for a non-compete dispute deductible?

Potentially yes — legal fees directly related to protecting your business interests (enforcing a non-compete, defending a business contract, etc.) are generally deductible. Legal fees related to personal matters are not.