Are Investment Advisory Fees Deductible in New York?

Eric DawsonByEric Dawson Business

Are investment advisory fees deductible in New York? New York permits itemized deductions under federal rules generally in effect before the post-2017 changes, and taxpayers may claim job expenses and miscellaneous deductions on Form IT-196, lines 21 through 24, even when they did not itemize federally.

New York treats investment advisory fees as miscellaneous itemized deductions, as TurboTax Community contributors describe, and such deductions were allowed before the TCJA only to the extent they exceeded 2% of adjusted gross income, according to Asena Advisors. Federal individual returns do not allow these miscellaneous deductions for tax years beginning after December 31, 2025. Complete Form IT-196 and compare New York itemized deductions with the New York standard deduction.

Are Investment Advisory Fees Deductible in New York?

Generally, New York permits itemized deductions for job expenses and miscellaneous deductions that federal individual returns no longer allow. Qualifying investment expenses may fall within that New York category, though taxpayers should apply the Form IT-196 instructions to the particular fee charged by their adviser.

Since tax year 2018, those miscellaneous deductions have not been available on federal individual returns. New York instead generally uses those earlier federal rules. That approach can create a New York investment fee deduction even when the same expense produces no federal deduction.

New York’s Miscellaneous-Deduction Rule

For New York income-tax purposes, taxpayers use Form IT-196 to calculate itemized deductions. State guidance says job expenses and miscellaneous deductions can be claimed on lines 21 through 24, including by taxpayers who did not itemize on their federal return. Community contributors on TurboTax describe qualifying fees as part of that category. The deduction remains subject to the stated limitation.

Because the official New York materials describe the broader miscellaneous-deduction category rather than naming every type of adviser charge, the classification of a particular invoice matters. A fee for investment management may require different treatment from investment interest, which has its own entry on Form IT-196. Expenses already claimed on federal Schedule C, Schedule E, or Schedule F cannot also be claimed as New York itemized deductions. Fees connected with business, rental, or farm activity therefore need to be kept separate from personal investment expenses.

Itemizing Is Still Necessary

For deductible financial advisor fees on a New York return, if itemized deductions are larger, New York State and New York City income tax will generally be lower. Married taxpayers filing separate New York returns face an additional rule: both spouses must use the standard deduction unless both elect to itemize. Careful records should show the fee paid, the account or investment activity involved, and any amount reported elsewhere on the return.

How New York Itemized Deductions Differ from Federal Rules

Consequently, a deduction disallowed on a federal individual return can still be relevant when preparing a New York return.

Federal law eliminated itemized deductions for job expenses and certain miscellaneous expenses subject to the 2% of adjusted gross income floor beginning in tax year 2018. New York retained a separate path for taxpayers to claim job expenses and miscellaneous deductions on Form IT-196. Unlike the federal return, the state calculation can be completed even if the taxpayer did not itemize deductions federally.

Separate State Calculation

For resident, nonresident, and part-year resident returns, taxpayers who did not file federal Schedule A may need to calculate certain deductions as though they had itemized federally, using a 2024 federal Schedule A and its instructions. Amounts from a filed federal Schedule A may also be usable for parts of the New York calculation, although New York limitations can differ from current federal limitations.

Comparison Point Federal Treatment New York Treatment Return Location
Itemizing deductions Current federal rules govern the federal return. Taxpayers may itemize beginning with tax year 2018 even without federal itemization. Form IT-196
Job expenses Not deductible as a federal miscellaneous deduction subject to the 2% floor. Allowed as part of New York job expenses and miscellaneous deductions. IT-196 lines 21 through 24
Miscellaneous deductions Certain deductions subject to the 2% floor are unavailable. New York permits these deductions under its itemized-deduction rules. IT-196 lines 21 through 24
State and local taxes As of September 2026, a combined $10,000 limit applies for 2024, or $5,000 for married taxpayers filing separately. New York state and local taxes paid are not subject to that federal limit. Form IT-196

That difference matters because the New York itemized-deduction total may be larger than the New York standard deduction even when the federal return uses the standard deduction.

Limits Still Apply

New York’s pre-2018-style framework does not allow the same expense to be claimed twice. Investment interest follows a separate route from miscellaneous expenses, with the federal Schedule A line 9 amount entered on Form IT-196 line 14. Careful separation of business, rental, farm, interest, and miscellaneous expenses helps keep the state calculation aligned with the form’s structure.

Where Investment Fees Fit on a New York Return

Qualifying investment expenses may fit in Form IT-196’s miscellaneous-deduction area, which the New York Department of Taxation and Finance directs filers to report on lines 21 through 24 alongside job-expense entries. Advisory fees need careful classification because the instructions’ general description of miscellaneous expenses does not identify financial-adviser or portfolio-management charges by name.

Taxpayers who filed federal Schedule A may be able to carry over applicable amounts, while people who did not itemize federally may need to use the alternative calculation process described in the instructions. New York treatment may differ from federal treatment.

Community contributors at TurboTax discuss investment expenses in the New York miscellaneous deduction context, including how limitations apply. Their reports help explain why tax software may present a New York investment fee deduction entry even when a federal return has no comparable entry.

Official instructions establish the broader miscellaneous-deduction category and direct filers to these lines, but an invoice’s labels and services still matter when determining how a particular charge fits. Accordingly, the treatment of a standard retail advisory or asset-management fee should be checked against the applicable instructions before filing.

Investment interest follows separate reporting instructions rather than the miscellaneous expense category. Separating interest from advisory or management charges helps prevent an investment-related cost from being placed in the wrong category.

Before claiming a financial-adviser fee as deductible, retain statements, invoices, and records showing the fee charged and the account or service involved. Professional advice can help assess fees that combine investment management with other services or relate to tax-exempt income, retirement accounts, business property, or rental activities.

How to Calculate Itemized Deductions in New York

Choose the larger amount under the comparison described above when completing the New York return.

Build the New York Calculation

Taxpayers who did not itemize on their federal return may need to follow the earlier guidance for certain deductions under the 2024 instructions.

  1. Gather records for expenses that Form IT-196 addresses, including medical and dental expenses, unreimbursed employee business expenses, certain taxes, interest, contributions, and miscellaneous expenses.
  2. Complete the applicable portions of Form IT-196 using the instructions as directed in the earlier discussion.
  3. Calculate the relevant deductions in the Form IT-196 area covering lines 21 through 24.
  4. Apply the required New York calculations and limitations rather than assuming current federal limits control the state result.
  5. Add the allowable amounts to reach your New York itemized-deduction total.

If itemizing produces the higher deduction, use the itemized amount on the New York return; otherwise, the standard deduction may produce the better result. For investment fees, apply the earlier discussion when determining the New York tax result under the relevant miscellaneous-deduction rules.

Check Expenses Before Counting Them Twice

Exclude any expense already deducted on federal Schedule C, Schedule E, or Schedule F, because New York does not allow that same item again as an itemized deduction. Keep investment interest separate from other investment expenses, as noted earlier in the discussion. Records should show the amount paid, the expense category, and any federal return amount used in the New York calculation.

Separate filers should follow the applicable choice described earlier for 2024. Both spouses must follow the applicable choice on their New York returns, as described earlier. Where spouses paid expenses jointly, the Form IT-196 instructions provide a method for dividing the allowable portion between them. Review the completed form against the instructions before filing, following the earlier discussion of differing calculations and limitations.

The 2% Federal AGI Limitation for Investment Expenses

Users on TurboTax Community report that qualifying investment expenses receive the treatment noted above. Accordingly, only the portion of qualifying expenses above 2% of federal AGI may contribute to a New York investment fee deduction.

First, identify federal AGI for the return. Then multiply the relevant figure to establish the threshold described in the community guidance. Total qualifying miscellaneous expenses would need to exceed that threshold before any excess could enter the miscellaneous-deduction calculation. Unlike a direct dollar-for-dollar write-off, the floor can mean that smaller fees produce no deduction, while a larger total may produce a deduction only for the excess.

Advisory fees require particular care. Community contributors specifically discuss these fees in the New York context. Because that description comes from community discussion, check the fee’s classification under the applicable Form IT-196 instructions before claiming it. That review is especially useful when considering whether financial advisor fees are deductible, since the service shown on an invoice can affect the category used.

Classification also matters when one charge covers more than investment management. Fees may combine investment advice with the other services or assets noted above. Separate investment interest follows the different path noted above.

Before relying on the 2% calculation, retain adviser statements and payment records that identify the service and account involved. Current Form IT-196 instructions govern the return, with the differences noted above. Professional advice may help when a fee serves several purposes or relates to tax-exempt income, a business, or a trust.

I would begin with New York’s itemized deduction framework rather than the federal result, because New York keeps a path for miscellaneous deductions that federal law removed. Still, the 2% federal AGI limit can make a modest fee irrelevant. With $100,000 of federal AGI, 2% equals $2,000, so a $3,000 qualifying investment expense would leave only $1,000 after that threshold. I would complete IT-196 and compare the full itemized total with the New York standard deduction before treating the fee as tax saving.

Investment Interest, Business Expenses, and Other Exceptions

Investment interest is not the same expense as an advisory fee, and New York addresses it separately on its itemized-deduction form. Beyond that, investment interest follows the separate reporting route noted above.

For New York itemized deductions, that separate reporting matters because an interest charge and a financial-adviser charge do not belong in the same category. Instead, taxpayers should keep investment-interest amounts distinct from investment expenses claimed among miscellaneous deductions. That approach also helps prevent an amount from being entered twice or assigned to the wrong area of the return.

Business, Rental, and Farm Expenses

Those expenses can require different treatment. Likewise, advisory fees incurred as an ordinary and necessary trade-or-business expense may fall under rules that differ from the rules for an individual’s personal portfolio.

Trusts can also have treatment that differs from an individual’s deduction for personal investment expenses. Expenses related to tax-exempt income may require adjustments, including where an adviser fee relates in part to investments producing tax-exempt income. Care is especially appropriate for a combined fee covering taxable investments, retirement accounts, business assets, financial planning, or tax-exempt holdings.

Keep those expense categories separate before completing the return. Separating those amounts supports a cleaner Form IT-196 calculation and avoids duplicating a deduction already used on another federal schedule. A tax professional can help determine the proper treatment when an invoice covers more than one account, service, or type of income.

Records and Filing Issues to Check Before Claiming a Deduction

Careful records help support the claim and prevent the same expense from being claimed twice. Before entering investment expenses tax deduction amounts on Form IT-196, review the fee description, the account involved, and how the charge was handled on the federal return.

Fee statements and adviser invoices can help a taxpayer identify the portion of a charge connected with investment services. Separate review is particularly useful for a combined advisory charge that covers taxable investments, IRAs, tax-exempt income, financial planning, or business assets, since the treatment can depend on the nature of the expense.

Married Filing Separately and Joint Expenses

Jointly paid expenses require an allocation between the spouses under the Form IT-196 instructions. For expenses paid from a joint account, the instructions provide methods for determining each spouse’s share, including a general rule that spouses with equal interests in a joint checking account each claim half of qualifying medical expenses unless one spouse can show that they paid more.

Individual review also makes sense when the expense description does not clearly identify it as an investment expense for New York itemized deductions. Because the New York materials permit miscellaneous deductions but do not specifically name standard financial-adviser or portfolio-management fees, taxpayers should apply the Form IT-196 instructions to their own fee arrangement.

Taxpayers who did not itemize federally may need to calculate certain deductions as though they had itemized on a federal Schedule A, while those who filed Schedule A may be able to use some of its amounts for the New York calculation.

This guide does not combine personal investment fees with business, rental, or farm expenses.

Frequently Asked Questions

Can I Deduct Financial Advisor Fees on My New York Tax Return?

New York allows itemized miscellaneous deductions on Form IT-196 under rules generally based on federal law before the post-2017 changes. TurboTax Community contributors report that qualifying investment expenses, including financial advisory fees, may fall within that New York category and are subject to a 2% of federal adjusted gross income limitation. Fee classification can depend on the services covered and the account involved.

Do I Have to Itemize Federally to Claim Itemized Deductions in New York?

No. Beginning with tax year 2018, New York allows taxpayers to itemize deductions for state income tax purposes even if they did not itemize on their federal return. Taxpayers who did not file a federal Schedule A may need to calculate certain deductions as if they had itemized federally when completing Form IT-196.

Where Do Miscellaneous Deductions Go on Form IT-196?

The instructions say Form IT-196 is used to calculate New York itemized deductions, which can differ from current federal calculations and limitations.

Are Investment Advisory Fees Deductible on a Federal Return?

Individual investment advisory, financial-planning, and portfolio-management fees are not deductible as federal miscellaneous itemized deductions for tax years beginning after December 31, 2025.

Is Investment Interest the Same as an Investment Advisory Fee?

No. Investment interest is addressed separately from advisory fees in the New York instructions. Taxpayers enter the amount from federal Schedule A, line 9, on Form IT-196, line 14.

Can I Claim an Expense Already Deducted on Schedule C, Schedule E, or Schedule F?

Beyond that, no. New York does not allow an itemized deduction for an expense already deducted on federal Schedule C, Schedule E, or Schedule F. A taxpayer should avoid claiming the same expense both as a business, rental, or farm expense and as a New York itemized deduction.

New York’s itemized-deduction rules can produce a different result from the federal return. Financial advisor fees may fit within the state’s miscellaneous-deduction treatment, but the classification of a particular fee can matter, especially where services involve retirement accounts, tax-exempt income, business assets, or combined planning and investment services. Complete Form IT-196 carefully, compare the resulting New York itemized deduction with the New York standard deduction, and consider professional advice for a fee arrangement with mixed purposes.

References

Sources read in September 2026.

Eric Dawson

I'm Eric Dawson, and I write The Money Watch from north Columbus, Ohio. Most of what I cover comes from my own life: renting, a 2014 Honda Fit, parking, computers, food and the bills behind all of it. I spent four years in an apartment-property office and eleven on a distributor's operations desk, reading leases and invoices. Where you need real information, I research the maker's or agency's own page and independent sources and report what they publish. I don't give tax, investment, legal or medical advice.