What if I paid a fee to my advisor?

If you paid $6,000 in fees to your advisor, $2,000 of that would have been eligible for the deduction. The Tax Cuts and Jobs Act, however, eliminated these deductions beginning with the 2018 tax year. This change to the tax code, along with others established by the act, are set to remain in effect through 2025.

Are investment advisory fees tax deductible?

Prior to 2018, investors could deduct some or all of their investment advisory fees on their federal tax returns. The Tax Cuts and Jobs Act (TCJA) of 2017, effective for tax years 2018 to 2025, eliminated the deductibility for "miscellaneous items," such as fees for financial advice, IRA custodial fees and accounting fees.

Should you pay advisory fees from a Roth account?

Roth contributions are made with taxed dollars because no deduction is available for these accounts, but the money and its growth can be taken tax free in retirement if it's a qualified distribution. That's why it doesn't make much sense to pay advisory fees from a Roth account.