NYS Miscellaneous Expenses

sinn_7

I have (3) Accounts with TD Ameritrade which are managed by an Advisor. (1) IRA (1) Benevolent IRA (1)TOD account. I know that I can deduct management fees from TDA Ameritrade as well as from the Investment Advisor on the IRA's but can I deduct the management fees from the TOD account as well?

Thank you!

KeriC

While the NY instructions don't specifically list TOD accounts, TOD is considered a designation on brokerage accounts, stocks, bonds, and other investment types. Because they are considered investment accounts, a TOD account would meet the criteria for investment management fees deductible on your NY return as a miscellaneous expense.

sinn_7

Thank you!

sinn_7

Has NYS removed the deduction for Investment Management fees?

TaxMorgan

Hello sinn_7,

I am still seeing a deduction allowed for "your share of the investment expenses of a regulated investment company" as a miscellaneous itemized deduction on a NY return.

You can see those instructions here with miscellaneous deductions on page 16

If you have more specific questions referring to your individual tax return, please contact customer support through the support center in your account.

sinn_7

Where would these be entered? "Other miscellaneous deductions" has a drop down menu and "regulated investment expenses" is not listed…

sinn_7

THE BELOW INFORMATION IS WHAT LEAD ME TO BELIEVE THAT YOU CAN NO LONGER DEDUCT INVESTMENT MANAGEMENT FEES.

What are other deductible investment expenses?

Other deductible investment expenses are your allowed deductions, other than interest expense, directly connected with the production of investment income. This could include depreciation or depletion allowed on assets that produce investment income and deductible investment expenses from a Schedule K-1.

"Don't include investment fees, custodial fees, or trust administration fees since these miscellaneous expenses are no longer allowed deductions."

MatthewD

I need to clarify an important change in tax law regarding investment management fees.

Unfortunately, investment management fees and advisor fees are generally not deductible. This applies to fees paid on your IRA accounts, your TOD (Transfer on Death) account, and fees paid to TD Ameritrade or your investment advisor.

The Tax Cuts and Jobs Act of 2017 eliminated the deduction for investment management fees as miscellaneous itemized deductions subject to the 2% AGI limitation. This elimination is in effect for tax years 2018 through 2025.

The only investment-related expenses that may still be deductible are:
- Investment interest expense (interest paid on money borrowed to purchase investments)
- Expenses directly connected with the production of investment income in very specific circumstances (such as certain business or rental activities)

Standard investment management and advisory fees don't fall into these categories, so they can't be deducted on your 2023 return regardless of the type of account (IRA, Benevolent IRA, or TOD).

sinn_7

My questions pertained to NYS itemized deductions, not the Feds.

MatthewD

Hi Sinn_7,

Thank you for the clarification. NY has an itemized deduction for "Investment Expenses" which may be different from the Federal. See this page for information from NY on these allowable deductions.

https://www.tax.ny.gov/pit/file/itemized-deductions.htm

Keep in mind that if your standard deduction is higher the software will use it.