Is my accounting fee a tax write-off?
Short answer
Yes. For a creator business, DeCypher's fee is generally a deductible business expense under legal and professional services.
Otavio Mayole, Co-founder, DeCypher FinancialsUpdated
A deduction lowers your taxable income, not your bill dollar for dollar. If your combined tax rate is around 30%, a deductible fee effectively costs you about 70% of its price.
Timing matters. Your books are kept on a cash basis, so a fee generally counts in the year you pay it. That's why some creators pay in full before December 31, to take the whole deduction that year.
Other professional fees work the same way, including lawyers, other accountants and business coaches you hire for your business.