Are Brokerage Commissions & Fees Tax Deductible for 2025 Filing?

But what about if you're trading futures or options? Are those commission structures handled differently? I've heard options traders can sometimes deduct those separately.

For options and futures trading, the same general principle applies - the commissions are typically incorporated into the cost basis and proceeds calculations. Options trading fees would be added to the cost of purchasing contracts and subtracted from the proceeds when selling them. For futures trading, it works similarly, though the tax treatment of futures themselves is different (Section 1256 contracts with the 60/40 rule). But the commission handling is generally the same - they're part of your cost basis and proceeds calculations, not separate deductible expenses.

Does taxr.ai work with other brokerages too? I use Fidelity and have similar questions about my fees.

I'm a bit skeptical about these AI tax tools. Did it actually give you specific advice or just general information? And how much did it cost?

Yes, it works with all major brokerages including Fidelity. You just upload your statements and it processes them automatically. The system recognizes the format regardless of which brokerage you use. It actually gave me very specific advice based on my personal trading history and documents. It identified exact transactions where wash sales occurred and showed me exactly how my commissions were being handled in my specific 1099-B. Not just general info - it analyzed my actual trading patterns and documents.

How does this actually work though? Like do they have some special access to get through faster or something?

Sounds like a scam. Why would I pay someone else to make a phone call that I could make myself? TDA's customer service isn't that bad.

They don't have special access - they use automated technology to handle the waiting on hold part for you. Basically their system calls the company, navigates the phone tree, waits on hold, and then when a human finally answers, it connects you. So you don't have to waste your time listening to hold music for an hour. I thought the same thing initially, but after spending 3 hours trying to reach someone who could actually help with tax questions (and getting transferred multiple times), it was worth it. TDA's general customer service is good, but trying to reach someone who can actually answer specific tax questions is much harder. The regular reps kept telling me they "couldn't provide tax advice" just like you experienced.

What exactly makes someone a "trader" vs an "investor" for tax purposes? I do trade pretty actively (a few hundred trades last year).

The IRS looks at several factors to determine trader status, and it's pretty strict. Generally, you need to: 1) Trade substantially, regularly, and continuously (typically hundreds or thousands of trades per year) 2) Seek to profit from short-term market swings rather than dividends or long-term appreciation 3) Trading must be your main business activity, spending several hours daily on it Even with a few hundred trades, you might not qualify if you're holding positions for weeks/months or if trading isn't your primary source of income. The tax court has historically set a very high bar for this status. If you're seriously considering this route, you should consult with a tax professional specialized in trading, as making a Section 475(f) election has significant implications and must be done properly and on time.

Omg thank you! Just checked my statement and found the exact same language. Been stressing about this for no reason!

Great point about the tax software Marcus! I just started using FreeTaxUSA this year and was wondering how it would handle all my trading activity. Good to know it should process the 1099-B data correctly. I'm curious though - for those of you using tax software, did you run into any issues with wash sale calculations? I've heard some programs struggle with that when you have a lot of trades across different accounts or brokerages.

I had some issues with wash sale calculations when I was using multiple brokerages. FreeTaxUSA handled the wash sales correctly within each individual 1099-B, but it couldn't automatically detect wash sales that occurred between my Fidelity and E*TRADE accounts. For example, if I sold a stock at a loss in my Fidelity account and then bought the same stock in my E*TRADE account within 30 days, the software didn't catch that as a wash sale since it was looking at each 1099-B separately. I had to manually review my trading activity across both accounts and make adjustments for those cross-brokerage wash sales. It's definitely something to watch out for if you're trading the same securities across multiple platforms.

I've actually had some challenges with wash sale calculations when using multiple brokerages. FreeTaxUSA and most tax software can only track wash sales within the same brokerage - they can't see across different accounts to catch wash sales between, say, your Schwab and Fidelity accounts. If you're trading the same securities across multiple brokerages, you might need to manually identify and adjust for wash sales that occur between accounts. This is one area where that taxr.ai tool someone mentioned earlier might actually be helpful, since it can analyze all your accounts together to catch cross-brokerage wash sales that the standard tax software would miss. For single-brokerage situations though, the software should handle it fine since your 1099-B from each broker already includes their wash sale adjustments.

I can speak to the wash sale issue with tax software! I use TurboTax and had trades across both Fidelity and Vanguard accounts last year. The software handled wash sales within each brokerage pretty well since that info comes on the 1099-B, but it couldn't automatically detect wash sales BETWEEN the two brokerages. I had to manually review and adjust for a few situations where I sold at a loss in one account and bought the same security in the other account within 30 days. The software has a section where you can manually enter wash sale adjustments, but you have to catch these cross-brokerage situations yourself. If you only trade with one brokerage, you should be fine since they're required to track and report wash sales on your 1099-B. But definitely double-check if you have multiple accounts!

@Miguel Silva I can speak to this from experience! I used TurboTax last year with trading across both Fidelity and E*TRADE accounts, and it did struggle a bit with wash sale calculations across the two brokerages. The software handled wash sales within each individual account perfectly, but it couldn t'automatically detect wash sales between the two different brokerages. For example, if I sold XYZ stock at a loss in my Fidelity account and then bought it back within 30 days in my E*TRADE account, TurboTax didn t'catch that as a wash sale. I had to manually identify and adjust those situations. The good news is that most people trade primarily through one brokerage, so this isn t'usually an issue. But if you re'actively trading the same securities across multiple accounts, you ll'want to keep an eye on this and do some manual checking. FreeTaxUSA might handle this differently though - would be interested to hear if anyone has experience with cross-brokerage wash sale detection in that software!

I can speak to the wash sale issue with tax software - I use TurboTax and had problems last year when I had accounts at both Fidelity and Robinhood. The software handled wash sales fine within each individual 1099-B, but it didn't catch wash sales that occurred across the two different brokerages. For example, if I sold AAPL at a loss in my Fidelity account and then bought it back within 30 days in my Robinhood account, TurboTax didn't flag that as a wash sale since it was looking at each 1099-B separately. I had to manually identify and adjust those cross-brokerage wash sales. If you're only trading within one brokerage account, the software should handle it correctly since modern brokerages are required to track and report wash sales on their 1099-B forms. But if you have multiple accounts, definitely double-check those calculations manually.

I can share my experience with wash sale calculations across multiple accounts. I use both TurboTax and have accounts at Fidelity and E*TRADE. The software generally handles wash sales well within a single brokerage, but it can miss wash sales that occur across different brokerages. For example, if you sell a stock at a loss in your Fidelity account and then buy the same stock in your E*TRADE account within 30 days, the software might not catch that wash sale unless you manually identify it. Each brokerage only reports wash sales for transactions within their own system. The good news is that most tax software will let you manually adjust for these cross-brokerage wash sales if you catch them. I keep a spreadsheet of my trades across all accounts specifically to watch for this issue. It's a bit tedious but worth it to avoid IRS complications later.

I've used FreeTaxUSA for the past two years with heavy trading activity and it generally handles wash sales pretty well, but there are some limitations to be aware of. It can correctly identify wash sales within the same brokerage account, but if you have trades across multiple brokerages (like if you sold at a loss in your Schwab account and bought the same security in your Fidelity account within 30 days), the software won't catch that cross-brokerage wash sale. Also, if you transferred securities between accounts during the year, that can sometimes confuse the wash sale calculations. I had to manually adjust a few transactions last year where I had transferred stocks from one brokerage to another. The good news is that most brokerages are pretty good about identifying wash sales within their own systems now, so if you're primarily trading within one account, you should be fine. But definitely review the wash sale adjustments the software makes - I always spot-check a few to make sure they look reasonable.

I had some issues with wash sale calculations when I used multiple brokerages last year. FreeTaxUSA handled the wash sales within each individual brokerage account correctly, but it didn't catch wash sales that occurred across different brokerages (like if I sold a stock at a loss in my Fidelity account and bought the same stock in my Schwab account within 30 days). You have to manually identify and adjust for those cross-brokerage wash sales yourself. The tax software only sees what's reported on each individual 1099-B, so it can't automatically detect when you've created wash sales across different accounts or brokerages. Something to keep in mind if you're trading the same securities across multiple platforms.

@Miguel Silva Great question about wash sales! I ve'actually dealt with this exact issue using FreeTaxUSA with multiple brokerage accounts TDA (and Fidelity .)The software does a decent job with wash sales within a single 1099-B, but it can miss wash sales that occur across different brokerages. For example, if you sell XYZ stock at a loss in your TDA account and then buy it back within 30 days in your Fidelity account, FreeTaxUSA won t'automatically catch that as a wash sale since it s'looking at each 1099-B separately. I ended up having to manually track these cross-brokerage wash sales using a spreadsheet. It s'tedious but necessary to stay compliant. Some of the more expensive software like TurboTax Premier supposedly handles this better, but I haven t'tried it personally. The taxr.ai tool that @AstroAlpha mentioned earlier actually sounds like it might be helpful for this specific issue since it can analyze multiple accounts simultaneously.

I can share my experience with FreeTaxUSA and wash sales - it generally handles them well when all your trading is within a single brokerage account. The 1099-B from most major brokerages (including TDA, Schwab, Fidelity) already includes wash sale adjustments, so FreeTaxUSA just imports that data correctly. Where it gets tricky is if you have multiple brokerage accounts or if you're trading the same securities across different platforms. The software can't automatically detect wash sales that occur between different brokerages since each one only reports their own transactions. In those cases, you might need to manually adjust for wash sales that cross account boundaries. Also, some people don't realize that wash sales can occur between substantially identical securities - like selling an S&P 500 ETF at a loss and buying shares in an S&P 500 mutual fund within the 30-day window. The software might miss those more complex situations. For straightforward single-account trading though, FreeTaxUSA should handle everything automatically when you import your 1099-B.

I can share some experience with wash sale calculations across multiple accounts. Most tax software, including FreeTaxUSA, can only calculate wash sales within the data you import to that specific return. So if you have trades across multiple brokerages, the software won't catch wash sales between those different accounts - you'd need to identify and adjust those manually. For example, if you sell Apple stock at a loss in your TDAmeritrade account and then buy Apple stock in your Schwab account within 30 days, the software won't automatically recognize that as a wash sale since the data comes from different 1099-B forms. The good news is that most brokerages now do a pretty good job of tracking wash sales within their own platform. Your 1099-B should already have most wash sales identified and the loss adjustments applied. But definitely double-check if you're trading the same securities across multiple accounts - that's where manual review becomes important.

I can speak to the wash sale issue with tax software! I use TurboTax and had trades across both Fidelity and Vanguard last year. The software handled wash sales pretty well within each brokerage (since they're already calculated on the 1099-B), but it definitely missed some cross-brokerage wash sales where I sold at a loss in one account and bought the same security in another within 30 days. I ended up having to manually adjust a few of those. The key is to keep good records of all your trades across all accounts, not just rely on what each individual brokerage reports. If you're actively trading the same securities in multiple accounts, you'll probably need to do some manual review regardless of which tax software you use. FreeTaxUSA might handle it differently, but I'd recommend double-checking any wash sale calculations if you have multiple brokerage accounts.

I can speak to the wash sale issue with tax software! I use TurboTax and had trades across both Fidelity and Vanguard last year. The software handled wash sales within each brokerage correctly since those are reported on the respective 1099-B forms, but it missed some wash sales that occurred between my two accounts. For example, I sold AAPL at a loss in my Fidelity account and bought it back within 30 days in my Vanguard account. Since each brokerage only sees their own transactions, neither 1099-B flagged this as a wash sale. I had to manually identify and adjust for these cross-account wash sales when preparing my return. If you only trade with one brokerage, the software should handle everything automatically. But if you have multiple accounts, you'll want to review for any potential wash sales that span across brokerages.

I can speak to the wash sale issue with tax software! I use TurboTax and had about 800 trades last year across TDAmeritrade and Fidelity accounts. The software handled most of the wash sales correctly when I imported both 1099-B forms, but I did have to manually review a few transactions where I had similar positions across both brokerages. The tricky part is when you sell a stock at a loss in one account and buy the same stock in another account within the 30-day window - the software might not catch that since it's looking at each 1099-B separately. I had to manually adjust a couple of those situations. For anyone with multiple brokerage accounts, I'd recommend doing a spot check of your wash sale calculations, especially for stocks you trade frequently across different platforms. Most of the time the software gets it right, but it's worth double-checking the complex scenarios.

I can speak to the wash sale issue with tax software! I use TurboTax and had trades across both Fidelity and Robinhood last year. The software handled wash sales within each brokerage correctly since those are reported on the 1099-B, but it missed some wash sales that occurred between the two different brokerages. For example, I sold AAPL at a loss in my Fidelity account and bought it back in my Robinhood account within 30 days. TurboTax didn't catch that cross-brokerage wash sale since each 1099-B only shows activity from that specific brokerage. I had to manually adjust those situations. It's definitely something to watch out for if you trade the same securities across multiple accounts or brokerages. The IRS wash sale rules apply to all your accounts combined, not just within individual brokerages.

@Miguel Silva I actually ran into that exact issue with wash sales across multiple accounts! I have positions at both Fidelity and Interactive Brokers, and while each brokerage correctly calculated wash sales within their own platform, they obviously can t'see trades at the other brokerage. So I ended up with some wash sales that weren t'properly identified because I sold at a loss at Fidelity but bought the same security at IB within the 30-day window. FreeTaxUSA didn t'catch this automatically since it was looking at each 1099-B separately. I had to manually track these cross-brokerage wash sales and make adjustments. It s'definitely something to watch out for if you re'trading the same securities across multiple platforms. The IRS expects you to apply wash sale rules across all your accounts, even if your brokerages can t'see each other s'trades.

@Miguel Silva I can answer that from experience! I had wash sale issues across my TDA and Fidelity accounts last year. FreeTaxUSA handled the wash sales that occurred within each individual brokerage just fine, but it couldn t'automatically detect wash sales that happened between my two different accounts like (selling XYZ at a loss in TDA and buying it back in Fidelity within 30 days .)I had to manually identify and adjust for those cross-account wash sales. The software gives you the ability to make manual adjustments, but you have to catch them yourself. This is actually a common limitation with most tax software - they can only work with the 1099-B data from each brokerage individually. If you re'trading the same securities across multiple accounts, it s'worth doing a manual review of your transactions around the end of the year to catch any potential wash sales that might span accounts.

@Miguel Silva I ve'had mixed experiences with wash sale calculations across different tax software. FreeTaxUSA generally handles it well when all your trades are with one brokerage, but it can get tricky if you re'trading the same securities across multiple accounts. The issue is that each brokerage only reports wash sales for transactions within their own system. So if you sell AAPL at a loss in your TDAmeritrade account and then buy AAPL in your Schwab account within 30 days, neither brokerage will flag that as a wash sale - but it technically is one for tax purposes. I ended up having to manually track some of these cross-brokerage wash sales. There are some third-party tools that can help consolidate all your trading data and catch these situations, but it requires extra work beyond just importing your 1099-B forms.

I've actually had some issues with wash sale calculations when using multiple brokerages. The tax software can only work with the wash sale adjustments that each individual brokerage reports on their 1099-B, but if you have the same security across different accounts (like holding AAPL at both Schwab and Fidelity), the software won't catch wash sales between those accounts. You have to manually track and adjust for those cross-brokerage wash sales yourself. I learned this the hard way last year when I got a notice from the IRS about underreported gains. Now I keep a detailed spreadsheet of all my trades across all accounts to catch these situations. The good news is that if you're only trading within one brokerage account, the software should handle everything correctly since your 1099-B will already include all the necessary wash sale adjustments.

@f791cdc18483 I've used both TurboTax and FreeTaxUSA for handling lots of trades, and wash sale calculations can definitely be tricky. The software generally does okay if all your trading is within one brokerage, but it can miss wash sales that happen across different accounts. For example, if you sell XYZ stock at a loss in your TD Ameritrade account and then buy it back within 30 days in your Fidelity account, the software might not catch that wash sale since it's looking at each 1099-B separately. I learned this the hard way a couple years ago and had to manually adjust several wash sales that the software missed. Now I keep a simple spreadsheet tracking any positions I hold across multiple brokerages, especially if I'm doing any loss harvesting near year-end. The good news is that most people don't have this issue if they're primarily trading in one main account!