Financial advisor fees appear to not be tax deductible!

[manaboutown]

As I am considering for the first time ever hiring someone to advise me on my securities investments I encountered this issue. To me this means the typical 1% AUM many if not most financial advisors seek actually costs much more on an after tax basis.

For example, say an advisor delivers a 10% gross return on one's portfolio. That means one pays regular rate income tax on 10% after receiving only 9%. Paying income tax in the top bracket of 37% federal tax, brings that AUM from 1% to 1.4%, + or - .

Apparently the amounts paid to a fee-only advisor are likewise nondeductible. Yuk!

Are Your Financial Advisor Fees Tax Deductible? | Bankrate (https://www.bankrate.com/investing/financial-advisor-fees-tax-deductable/#:~:text=No%2C%20they%20aren't.,to%20reducing%20yo ur%20tax%20bill).

[Rainger99]

As I am considering for the first time ever hiring someone to advise me on my securities investments I encountered this issue. To me this means the typical 1% AUM many if not most financial advisors seek actually costs much more on an after tax basis.

For example, say an advisor delivers a 10% gross return on one's portfolio. That means one pays regular rate income tax on 10% after receiving only 9%. Paying income tax in the top bracket of 37% federal tax, brings that AUM from 1% to 1.4%, + or - .

Apparently the amounts paid to a fee-only advisor are likewise nondeductible. Yuk!

Are Your Financial Advisor Fees Tax Deductible? | Bankrate (https://www.bankrate.com/investing/financial-advisor-fees-tax-deductable/#:~:text=No%2C%20they%20aren't.,to%20reducing%20yo ur%20tax%20bill).

You are correct. It was changed in the Tax Cuts and Jobs Act of 2017. But according to the following article, they may be deductible next year depending on what Congress does with the tax laws!

I Paid $4,500 in Fees to My Financial Advisor This Year. Is This Tax Deductible? (https://smartasset.com/taxes/paid-4500-fees-financial-advisor-tax-deductible)