Can You Write Off Your Financial Advisor's Bill on Your Taxes? What Changed Since 2017

The short answer: No, your financial advisor fees are not tax deductible in 2024 and 2025. But this wasn’t always the case, and the situation could shift again after 2025. Let’s break down what happened, why it matters, and what you need to know moving forward.

Why You Used to Be Able to Deduct These Expenses

Before 2017, individuals had access to what the IRS called “miscellaneous deductions”—a catchall category for various out-of-pocket professional expenses. This included:

• Payments to financial advisors and wealth managers
• Tax preparation and filing fees
• Charges from tax attorneys and accountants
• IRA custodian and account trustee fees

The beauty of this system was the 2% threshold rule. Here’s how it worked: you’d add up all qualifying miscellaneous deductions, then subtract 2% of your Adjusted Gross Income (AGI). Only the amount above that 2% threshold could be deducted.

Example: If your AGI was $100,000 (meaning 2% = $2,000) and you spent $5,000 on financial and tax services combined, you could deduct $3,000 ($5,000 - $2,000).

For affluent households paying substantial advisory fees—often around 1% of their portfolio annually—this deduction could represent meaningful tax savings. Someone managing a $1 million portfolio might pay $10,000 per year in fees, a significant portion of which could be written off.

The 2017 Tax Law Changed Everything

The Tax Cuts and Jobs Act (TCJA), passed in 2017, fundamentally restructured how individual taxes work. Among its many changes: the complete elimination of miscellaneous deductions for regular taxpayers.

In exchange, Congress dramatically expanded the standard deduction—the amount you can deduct without itemizing—to make up for it. For most Americans, this was actually a net win, since fewer people could benefit from miscellaneous deductions anyway (you only got them if you itemized rather than taking the standard deduction).

But here’s the critical detail: Congress included a sunset provision in the TCJA. Many of its individual tax provisions were scheduled to expire on December 31, 2025. This means that unless Congress acts, miscellaneous deductions—and your ability to deduct financial advisor fees—would theoretically return in 2026.

What Happens After 2025? Likely Extension

The Trump Administration and Republican-controlled Congress have both signaled their intention to extend the TCJA beyond its 2025 expiration. They’ve stated this repeatedly as a policy priority. If extended (as expected), the elimination of miscellaneous deductions would become permanent, meaning individuals would lose this deduction indefinitely.

However, nothing is guaranteed. Until Congress votes, there remains technical uncertainty. If they allow the law to expire without extension, taxpayers would regain the ability to claim miscellaneous deductions—including financial advisor fees—starting in tax year 2026.

Your $4,500 Bill: Is It Deductible?

Let’s apply this directly. Suppose you paid $4,500 to your financial advisor this year:

If you’re a W-2 employee: Almost certainly not deductible. You cannot claim these fees under current law, even if you itemize your deductions. This deduction simply doesn’t exist for individuals in 2024 and 2025.

If you’re self-employed: Maybe. Business owners can potentially deduct legitimate professional expenses—including financial advisory services—as business expenses rather than personal deductions. But this only works if:

• You can clearly separate business and personal finances
• The advisory services directly relate to your business
• You haven’t already commingled personal wealth management with business management

This requires careful documentation and depends on your specific situation. If you fall into this category, consult a tax professional.

What You Can Still Deduct

Just because financial advisor fees aren’t tax deductible doesn’t mean you’ve lost all tax optimization opportunities:

• Retirement contributions: Deposits to traditional IRAs, 401(k)s, and similar accounts reduce taxable income
• Capital losses: Investment losses can offset gains or up to $3,000 of regular income annually
• Charitable donations: If you itemize deductions
• Mortgage interest and property taxes: Subject to $750,000 mortgage limit and $10,000 SALT cap
• Business expenses: If self-employed

The larger standard deduction itself represents substantial tax relief compared to pre-2017 rules.

Planning Your Finances Going Forward

The bottom line: Accept that advisory fees come out of after-tax dollars in 2024 and beyond (barring a major policy reversal). This doesn’t make the fees worthless—a good advisor’s guidance can generate far more in returns than the fees cost. But factor this reality into your cost-benefit analysis when evaluating whether working with an advisor makes financial sense.

Stay alert to 2025 developments. If Congress votes to extend the TCJA, expect confirmation that you won’t regain this deduction. If they allow portions to expire, a small window might reopen in 2026.

Until then, focus your tax strategy on maximizing deductions that are available, building a robust emergency fund, and—if you work with an advisor—ensuring their guidance creates enough value to justify the after-tax cost.