Schedule C

17 — Legal and Professional Services Updated for tax year 2025

What this line means

Fees you paid to attorneys, accountants, bookkeepers, tax preparers, and other professionals for services directly related to your business. This includes the cost of having your business taxes prepared, legal consultations about contracts or business structure, bookkeeping services, and professional advice on business operations. The business portion of tax preparation fees goes here.

Does this apply to you?

  • You paid a CPA or tax preparer to prepare your Schedule C or business taxes
  • You hired an attorney for contract review, business formation, or business-related legal matters
  • You pay a bookkeeper to maintain your business records
  • You hired a consultant for professional advice on business operations
  • You paid for payroll processing services

Easy to overlook

Tax preparation fees for your business return are deductible The cost of preparing Schedule C, Schedule SE, and any other business-related forms is a deductible business expense on line 17. If your tax preparer charges a flat fee for your entire return, ask them to break out the business portion — that part goes here. The personal portion of tax preparation is no longer deductible for most filers after 2018. 1 [SOURCE: General filing pattern — overlooked professional fee deductions]

Business formation costs are deductible or amortizable Legal fees for setting up your business — drafting an operating agreement, filing for an EIN, registering with your state — are deductible up to $5,000 in the first year. 2 This deduction phases out dollar-for-dollar when total startup costs exceed $50,000. Amounts over $5,000 (or the reduced amount after phaseout) are amortized over 15 years. Many new sole proprietors pay these costs and never deduct them. [SOURCE: IRS Schedule C instructions — Line 17]

Watch out for this

Including the cost of personal legal services — estate planning, personal injury claims, divorce proceedings — on this line. Only fees for services directly related to your business are deductible on Schedule C. Personal legal fees are not deductible anywhere on the return for most taxpayers.

  • Line 11 — Schedule C — Contract labor; ongoing professional services can sometimes go on either line
  • Line 27a — Schedule C — Other expenses; specialized professional fees that do not fit line 17 can go here
  • Line 10 — Schedule C — Commissions and fees; sales-related professional fees go there

Footnotes

  1. IRS Publication 535, Business Expenses, Tax Preparation Fees. https://www.irs.gov/pub/irs-pdf/p535.pdf ↩

  2. IRS Publication 535, Business Expenses, Business Startup Costs (IRC Section 195). https://www.irs.gov/pub/irs-pdf/p535.pdf ↩

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