Can I Deduct Brokerage Commissions & Fees on My Taxes?

So I racked up around $25k in trading commissions and platform fees last year through my ThinkorSwim account. I'm trying to figure out if these are tax deductible somehow, or if they're already factored into my cost basis/proceeds calculations on the 1099 forms? I called my brokerage hoping for clarity and literally got told "sorry I can't give tax advice" by their support person. Like thanks for nothing lol. Anyone know how these fees are actually handled for tax purposes? This is a significant amount so I'd prefer to get it right before filing.

0 coins

21 comments

Tami Morgan

•8M

The good news is that most brokerage commissions and fees are already factored into your cost basis for securities. This means when you buy a stock, the commission gets added to your cost basis, and when you sell, the commission reduces your proceeds. For example, if you bought a stock for $1000 and paid a $10 commission, your actual cost basis would be $1010. When you sell for $1500 with another $10 commission, your proceeds would be $1490. The brokerage should be reporting these adjusted amounts on your 1099-B. However, if you're paying subscription fees for ThinkorSwim's advanced features or data packages, those aren't automatically included in cost basis calculations. Those platform fees might be deductible as investment expenses if you qualify as a trader for tax purposes rather than an investor, but the rules around this got very restrictive after the 2017 tax law changes.

0 coins

Tami Morgan

•8M

Yes, that's exactly right. The per-trade commissions should already be factored into the cost basis and proceeds reported on your 1099-B. You don't need to separately deduct those. For the platform subscription fees, those aren't automatically incorporated into your tax forms. Prior to 2018, those could be deducted as miscellaneous itemized deductions subject to the 2% AGI floor, but the Tax Cuts and Jobs Act suspended those deductions through 2025. The exception would be if you qualify as a "trader" in the eyes of the IRS rather than an investor, which has specific requirements including frequency of trades, holding periods, and whether trading is your primary business activity.

0 coins

Haley Bennett

•8M

I was in a similar situation last year with about $18k in commissions and fees from active trading. After hours of research, I found taxr.ai (https://taxr.ai) and uploaded my 1099s and statements. Their analysis showed that my brokerage had already factored most commissions into my cost basis, but they identified about $3k in platform fees that weren't included. Their software also analyzed my trading patterns and determined I could qualify for trader status which made a huge difference for deducting those platform fees.

0 coins

Haley Bennett

•8M

The service works by analyzing your brokerage documents using AI to identify patterns and tax opportunities. You upload your statements and trade confirmations, and it actually highlights where each commission appears in your documents and whether it's been properly included in your cost basis calculations. It saved me hours of manual reconciliation work. For trader status qualification, the software doesn't "get you" trader status - it analyzes your trading frequency, holding periods, and patterns to determine if you already meet the IRS criteria. It provides documentation to support your position if you qualify, including trade analysis reports that show your average holding periods, number of trades, and time devoted to trading. It's not about claiming something you don't qualify for but having proper documentation if you do.

0 coins

Nina Chan

•8M

I was super skeptical about the trader status thing but decided to try taxr.ai anyway. Turns out I actually did qualify based on my trading frequency (500+ trades, average holding period under 25 days). The software generated a detailed report showing all my trading stats and identified about $7k in platform fees I could deduct as business expenses. My accountant was impressed with the documentation and said it would definitely hold up if questioned. Saved me nearly $2k in taxes I would have missed.

0 coins

Ruby Knight

•8M

Just want to share something that helped me get through to the IRS when I had questions about this exact issue. I was stuck in those endless phone loops for weeks. Then I found Claimyr (https://claimyr.com) - they have this service that gets you through to an actual IRS person. You can see how it works here: https://youtu.be/_kiP6q8DX5c I finally got clear answers about my brokerage fees from an actual IRS agent who confirmed that while trade commissions are part of cost basis, certain platform fees can be deductible if you qualify as a trader. The IRS agent walked me through the exact requirements and how to document everything properly.

0 coins

Ruby Knight

•8M

It works by using an automated system that navigates the IRS phone tree and waits on hold for you. When an agent finally answers, you get a call connecting you directly to them. It doesn't jump any queues - it just handles the waiting part so you don't have to sit with a phone to your ear for hours. The service calls the IRS using their automated system and then calls your phone when an actual human agent picks up. It's completely legitimate - they're just saving you from the hold time. I was connected to an IRS representative in about 75 minutes while I was able to do other things instead of waiting on hold myself. The agent I spoke with was incredibly helpful in clarifying the rules around trading expenses.

0 coins

Nina Chan

•8M

Update on my skepticism: I actually tried Claimyr last week for a different tax question related to my trading expenses. I got connected to an IRS agent in about 55 minutes without having to wait on hold myself. The agent confirmed that my platform data fees can be deductible as ordinary business expenses if I qualify as a trader (which I do based on my volume). Definitely worth the service to get clarity directly from the IRS instead of getting the runaround from my brokerage. Will be using this every time I need to call them now.

0 coins

Logan Stewart

•8M

Yes, I had to provide extensive documentation. The IRS wanted to see my trading logs showing frequency (daily activity), volume (number of trades), holding periods (short-term focus), and time commitment (hours per day). They also looked at whether I had a separate trading account from my investment accounts. I recommend keeping a daily trading journal noting hours spent, research performed, and trading strategy. Save all your brokerage statements organized by month. Create spreadsheets tracking your trades showing the holding periods - this is crucial as day trading or very short holding periods support trader status. Document that trading is your business activity, not just a side hobby. If possible, have a dedicated home office for trading and track those expenses separately too.

0 coins

Emma Johnson

•3M

@Sean Matthews is right about TurboTax being tricky for trader status. I had the same issue last year. The key is to NOT put your actual stock trades on Schedule C - those always go on Schedule D or 8949. Only the business expenses like platform fees, data subscriptions, trading education, home office allocation, etc. go on Schedule C. In TurboTax, you ll'need to start a Business "section" and create a sole proprietorship for your trading business. Then under business expenses, you can categorize things like your ThinkorSwim platform fees under Other "Business Expenses or" Software/Subscriptions. "Just" make sure you have good records showing you actually qualify for trader status based on frequency and holding periods. If TurboTax keeps flagging errors, it might be worth the extra cost to use a tax pro who understands trader tax elections. The software isn t'really designed for this more complex scenario.

0 coins

Emma Olsen

•3M

Maya, I went through the exact same situation with similar commission amounts last year. Here's what I learned after digging deep into this: 1. **Trading commissions** - These are already baked into your cost basis on your 1099-B forms. When you buy stock for $1000 with a $5 commission, your cost basis is reported as $1005. When you sell for $1200 with another $5 commission, proceeds show as $1195. So those per-trade fees are already handled. 2. **Platform subscription fees** - These are the tricky ones. Your monthly ThinkorSwim fees, data packages, or premium features aren't included in cost basis calculations. Under current tax law (post-2017), these generally can't be deducted as miscellaneous itemized deductions. 3. **The trader status exception** - If you qualify as a "trader" rather than an "investor" in the IRS's eyes, you can deduct platform fees as business expenses on Schedule C. The requirements are strict: frequent trading (think hundreds of trades), short holding periods (days/weeks not months), and substantial time commitment to trading activities. With $25k in total fees, it's definitely worth having a tax professional review your situation. They can help determine if you might qualify for trader status and ensure you're not missing any legitimate deductions while staying compliant with IRS rules.

0 coins