Can you claim accountant, tax preparer and legal fees as a freelancer? Accounts, tax returns, disputes and fees on assets under the IRS, HMRC and CRA rules (US, UK, Canada)

An accountant for your year-end accounts, a bookkeeper, someone to prepare your tax return, a lawyer to check a contract: most freelancers pay an adviser sooner or later. Here's what the IRS, HMRC and the CRA say about claiming those fees, why the tax return itself is treated differently in each country, what happens to fees for an audit or a tax dispute and for buying equipment, what to do when an invoice mixes business and personal work, and what to keep.

General information, not tax, legal or accounting advice. Not written or reviewed by a lawyer or an accountant. The short answer, the side-by-side summary, the steps, the checklist, the wording to copy and all the other wording are ours; the official items come from the US, UK and Canadian government pages linked below. This page is about a self-employed person (a sole proprietor or sole trader) paying accountants, bookkeepers, tax preparers, lawyers and other advisers. It doesn't tell you whether a particular fee counts, what share of an invoice is business, or which line or box applies to you, and it doesn't cover the costs of starting a business or forming a company, lawsuits, employees, companies, sales tax, VAT or GST/HST on fees, US states, Canadian provinces, Quebec, or other countries. Rules change; check the current official pages before you claim. Official pages were read on 2026-10-20.

The short answer

1. US: the small business publication says "Legal and professional fees, such as fees charged by accountants, that are ordinary and necessary expenses directly related to operating your business are deductible on Schedule C (Form 1040)." The instructions for the business schedule add "Include fees for tax advice related to your business and for preparation of the tax forms related to your business. Also, include expenses incurred in resolving asserted tax deficiencies related to your business."
2. UK: GOV.UK says "If you’re self-employed - a sole trader or individual in a business partnership - accountancy, legal and other professional fees can count as allowable business expenses." But its list of costs you can't claim includes preparing and submitting your Self Assessment return, while HMRC's manual allows the normal costs of agreeing the tax on business profits; see section four.
3. Canada: the CRA's professional fees line says "Deduct the fees you incurred for external professional advice or services, including consulting fees." "You can deduct accounting and legal fees you incur to get advice and help with keeping your records. You can also deduct fees you incur for preparing and filing your income tax and GST/HST returns."
4. An audit or a tax dispute? Each tax office treats these fees differently, and in Canada some go on another line of your return; see sections two, four and six.
5. Fees for buying equipment or property? The IRS and the CRA add them to the cost of the asset, and GOV.UK lists the legal costs of buying property and machinery among costs you can't claim; our guide to buying equipment as a freelancer covers the asset rules.

On this page

• 1. United States: accountants, lawyers and tax preparation
• 2. United States: fees for assets and tax disputes
• 3. United Kingdom: accountants, solicitors and other professionals
• 4. United Kingdom: HMRC's manuals on accounts, returns, enquiries and appeals
• 5. Canada: the professional fees line
• 6. Canada: CRA reviews, objections and appeals
• 7. Side by side
• 8. Step by step
• 9. Wording to copy
• 10. Checklist
• Free tools and kits
• Where the sources differ
• When to get advice
• Related
• Sources

1. United States: accountants, lawyers and tax preparation

• The general rule: "To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business."
• Legal and Professional Fees: "Legal and professional fees, such as fees charged by accountants, that are ordinary and necessary expenses directly related to operating your business are deductible on Schedule C (Form 1040)." (IRS: Publication 334 (2025), Tax Guide for Small Business, page date 30-Apr-2026).
• Where they go: under Line 17, the instructions say "Include on this line fees charged by accountants and attorneys that are ordinary and necessary expenses directly related to operating your business." "Include fees for tax advice related to your business and for preparation of the tax forms related to your business. Also, include expenses incurred in resolving asserted tax deficiencies related to your business." (IRS: Instructions for Schedule C (Form 1040) (2025), page date 30-Apr-2026).
• Your tax return: under Tax preparation fees. the publication says "You can deduct on Schedule C (Form 1040) the cost of preparing that part of your tax return relating to your business as a sole proprietor or statutory employee." Our reading: the part of the fee for the rest of your personal return isn't a business expense.
• Personal work: "If the fees include payments for work of a personal nature (such as making a will), you can take a business deduction only for the part of the fee related to your business." "If you have an expense that is partly for business and partly personal, separate the personal part from the business part." "The personal part is generally not deductible."

Tax filing software you buy yourself has its own sentence in the publication; our software subscriptions guide covers it. For the schedule itself, see Schedule C for US freelancers.

2. United States: fees for assets and tax disputes

• Buying business assets: "However, you usually can’t deduct legal fees you pay to acquire business assets. Add them to the basis of the property." Our equipment guide covers how the cost of an asset is then recovered.
• Tax disputes: "You can also deduct on Schedule C (Form 1040) the amount you pay or incur in resolving asserted tax deficiencies for your business as a sole proprietor or statutory employee." The instructions also put these expenses on the legal and professional services line (section one).

What an IRS audit asks for and how to respond is covered in our guide to tax audits and compliance checks.

3. United Kingdom: accountants, solicitors and other professionals

• The general rule: "If you’re self-employed - a sole trader or individual in a business partnership - accountancy, legal and other professional fees can count as allowable business expenses." "You can claim for costs such as:"
  • hiring of accountants, solicitors, surveyors and architects only for business reasons
  • professional indemnity insurance premiums
  "You cannot claim for:"
  • legal costs of buying property and machinery - if you use traditional accounting, claim for these costs as capital allowances
  • fines for breaking the law
  • the cost of preparing and submitting your Self Assessment tax return
  "If you’re not sure whether a business cost is an allowable expense contact HM Revenue and Customs (HMRC)." (GOV.UK: Expenses if you're self-employed, legal and financial costs, page date 2024-11-08).
• Business and personal use: "You can only claim allowable expenses for the business costs." (GOV.UK: Expenses if you're self-employed, page date 2024-11-08).
• On the return: the notes for the full self-employment pages say, under Box 28 Accountancy, legal and other professional fees, "This includes fees for accountants, solicitors, surveyors, architects and other professionals and indemnity insurance premiums." "The legal costs of buying property and large items of equipment and the costs of settling tax disputes are disallowable expenses. If you include them here, you also need to put the costs in box 43." (HMRC: Self-employment (full) notes, Tax year 6 April 2025 to 5 April 2026 (2025–26), PDF). If you use the short pages or give one total for expenses, check the notes for how to show a disallowable part.

Professional indemnity insurance is covered in our business insurance guide, and legal costs of buying equipment under capital allowances in our equipment guide. For the return as a whole, see UK Self Assessment for freelancers.

4. United Kingdom: HMRC's manuals on accounts, returns, enquiries and appeals

• General principles: HMRC's internal manual for its staff says "Professional fees are not allowable if they are:"
  • capital (see BIM35000 onwards), or
  • excluded by statute (e.g. they are not incurred wholly and exclusively for the purposes of the trade, see BIM37000 onwards, or they are losses which are not connected with/arising out of the trade, see BIM46445).
  "Except where the matter is clear-cut, the circumstances surrounding the payment and the precise nature of the professional services provided need to be examined to consider the nature and underlying purpose of the expenditure when it is incurred." (HMRC: BIM46405 - Specific deductions: professional fees: general principles, page date 2016-04-01).
• Accounts and the tax on your profits: "Fees incurred for preparing accounts for commercial reasons and for many other accountancy services satisfy the ‘wholly and exclusively’ test." "In strictness, any additional fees incurred for computing and agreeing the tax liability on trading profits are not allowable." "There is, however, a longstanding practice of allowing normal recurring legal, accountancy etc expenses incurred in preparing accounts, or agreeing the tax liability, see Statement of Practice SP 16/91 reproduced at EM3981."
• Your tax return: "For instance, the costs of completion of a tax return or the computation of Capital Gains Tax liability are not allowable in computing trading profits." "But the additional personal costs are likely to be minimal where, apart from the computation of the tax liability on trading profits, an individual’s personal tax affairs are straightforward." (HMRC: BIM46450 - Specific deductions: professional fees: taxation account & negotiations, page date 2016-04-01).
• A compliance check (enquiry): HMRC's enquiry manual says "It is the practice to allow, in computing profits assessable under Part 2 Chapter 4 of ITTOIA 2005 and under Case I & II Schedule D for companies, the normal accountancy expenses incurred in preparing accounts or accounts information and in assisting with the self assessment of tax liabilities." "Additional accountancy expenses arising out of an enquiry into the accounts information in a particular year's return will not be allowed where the enquiry reveals discrepancies and additional liabilities for the year of enquiry, or any earlier year, which arise as a result of"
  • negligent or fraudulent conduct or
  • for periods beginning on or after 1 April 2008 where the filing date for the return is on or after 1 April 2009, careless or deliberate behaviour.
  Where the enquiry adds nothing to your profits, or only adjusts that year's profits and not because of that kind of conduct, the manual says "the additional accountancy expenses will be allowable." It notes "The above guidance was published in Tax Bulletin 37 (October 1998) and supersedes Statement of Practice SP16/91 which applied to pre SA periods." (HMRC: EM3981 - Concluding an Enquiry: Accountancy Expenses Arising out of Enquiries, page date 2017-03-10).
• Appeals: "You should disallow the expenses incurred directly in connection with appeals to the Tribunal or the Courts against Income Tax, Corporation Tax or Capital Gains Tax assessments." (HMRC: BIM46455 - Specific deductions: professional fees: tax, rating & VAT appeals, page date 2018-12-14).

Our reading: ask your accountant to show the work on your business accounts and the tax on your profits separately from your other tax affairs, and keep a note of how any compliance check ended. What HMRC may ask for in a check is covered in our guide to tax audits and compliance checks.

5. Canada: the professional fees line

• The general rule: "Generally, you can deduct any reasonable current expense you incur to earn business income." "However, since you cannot deduct personal expenses, enter only the business part of expenses on the Form T2125, Statement of Business or Professional Activities." (CRA: Expenses section of Form T2125, page date 2026-08-31).
• Professional fees: "Deduct the fees you incurred for external professional advice or services, including consulting fees." "You can deduct accounting and legal fees you incur to get advice and help with keeping your records. You can also deduct fees you incur for preparing and filing your income tax and GST/HST returns."
• Buying capital property: "You cannot deduct legal and other fees you incur to buy a capital property, such as a boat or fishing material. Instead, add these fees to the cost of the property." (CRA: Line 8860 – Professional fees (includes legal and accounting fees), page date 2026-08-31). Our equipment guide covers capital cost allowance.
• The guide: the expenses chapter puts it as "You can deduct the fees you incurred for external professional advice, services and consulting fees." (CRA: Guide Self-employed Business, Professional, Commission, Farming, and Fishing Income: Chapter 3 – Expenses, page date 2026-04-16).

The expense lines sit in the expenses part of your statement of business or professional activities: see our guide for Canadian freelancers.

6. Canada: CRA reviews, objections and appeals

• Objections and appeals: the professional fees line page says "You can deduct accounting or legal fees you paid to have an objection or appeal prepared against an assessment for income tax, Canada Pension Plan or Quebec Pension Plan contributions, or employment insurance premiums." "However, the full amount of these deductible fees must first be reduced by any reimbursement of these fees that you have received. Enter the difference on line 23200, Other deductions of your income tax return." The guide says the same: "Report the difference on line 23200 of your tax return."
• The other deductions line: under legal fees, the CRA says "You can claim the following expenses:"
  • fees including any related accounting fees that you paid:
    • for advice or assistance to respond to the CRA when the CRA reviewed your income, deductions or credits for a year
    • to object to or appeal an assessment or decision under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan or the Quebec Pension Plan
  "You must reduce your claim by any award or reimbursement you received for these expenses." (CRA: Line 23200 – Other deductions, page date 2026-01-20).
• The older bulletin: both pages point to a CRA bulletin on legal and accounting fees, whose page says "We have archived this page and will not be updating it." (CRA: IT99R5-CONSOLID ARCHIVED - Legal and Accounting Fees, page date 2000-12-06).

Our reading: fees for help with a CRA review, an objection or an appeal are claimed on the other deductions line of your return, not with your business expenses. What an audit involves is covered in our guide to tax audits and compliance checks.

7. Side by side

Our summary of sections one to six, not official wording.

8. Step by step

Our order of steps, based on sections one to six — not an official checklist.

1. List every fee you paid in the year to an accountant, bookkeeper, tax preparer, lawyer or other adviser, with the date and what the work was for.
2. Ask each adviser to show business work and personal work, such as your personal tax affairs or a will, as separate items on the invoice.
3. Keep fees for buying equipment, a vehicle or property apart: they follow the rules for the asset rather than counting as an adviser’s fee, so use our equipment guide.
4. Keep fees for a tax audit, enquiry, review, objection or appeal apart, with the outcome, because each tax office treats them differently.
5. For tax return preparation, note how much of the fee relates to the business and how much to the rest of your return.
6. Check which line or box your tax office uses for these fees, and use the same one from year to year.
7. Keep each invoice and proof of payment with your records.
8. Ask the tax office or an adviser if you’re unsure, especially about disputes and fees for buying assets.

9. Wording to copy

Fill in everything in [brackets]. This is ours, not from any agency, and it's not tax, legal or accounting advice. It doesn't take the place of the invoices and records your tax office may ask for.

A list of your advisers' fees for your files

Professional fees list (my own records, not an official document)
Tax year: [year or period]
Adviser: [name], [accountant / bookkeeper / tax preparer / lawyer / other]
Invoice: [number or date], paid on [date], amount [amount]
Work done: [accounts / bookkeeping / tax return / advice / audit or dispute / contract / other]
Business part: [amount], personal part: [amount], split shown on the invoice: [yes / no]
Linked to buying an asset: [no / yes, see my equipment records]
Linked to an audit, enquiry or dispute: [no / yes], outcome: [outcome]
Reimbursement or award received: [no / yes, amount]
Line or box used: [line or box]
Invoice kept at: [where]

A request to your adviser to split the invoice

Hi [adviser's name],

Could you show the work for my business separately from any personal work on your invoice for [period]? For example: [bookkeeping and accounts for my business], [my personal tax return], [other work].

[If any of the work was for buying equipment, a vehicle or property, or for a tax audit, enquiry or dispute, could you list that separately too?]

That way my records match the work. Thanks,
[your name]

10. Checklist

Our summary of the official pages above, not an official checklist.

• Every accountant, bookkeeper, tax preparer, lawyer or other adviser you paid in the year
• What each fee was for, and whether the work was for the business, personal or both
• The business part of each mixed invoice, and how it was split
• Fees for buying an asset kept apart and handled under the equipment rules
• Fees for an audit, enquiry, review, objection or appeal kept apart, with the outcome
• Any reimbursement or award of fees you received
• Invoices and proof of payment kept
• The line or box you used on your return
• Anything you’re not sure about, checked with the tax office or an adviser

Free tools and kits

• Our free expense tracking guide shows a simple way to keep business cost records, with a professional fees category.
• Our free expense and receipt log keeps the details for each payment.
• Our paid Freelance Billing Kit by Small Rows (US$12, one-time) can log each fee: the Expenses tab has a date, a category, a description, the amount paid and a "Deductible? (your call)" column, and the category drop-down lets you pick Professional fees from the kit's own list, the legal and professional services line from the US list or the accountancy, legal and other professional fees box from the UK list, or type your own. Anything marked Yes counts in full, so if an invoice mixes business and personal work, enter it as a row marked Yes and a row marked No. It doesn't split invoices, decide what counts, pick the line or box for you, store invoices or file anything.
• All three kits together: the All-Kits Bundle by Small Rows (US$24, one-time).

Where the sources differ

• The tax return in the UK: GOV.UK's legal and financial costs page lists the cost of preparing and submitting your Self Assessment return among costs you can't claim, while HMRC's manual describes a longstanding practice of allowing normal recurring costs of preparing accounts or agreeing the tax on trading profits, and says only the personal costs, such as completing the return, aren't allowable. Our reading is that fees for your business accounts and for working out the tax on your business profits can usually be claimed, while the part for completing the return and your other tax affairs can't; ask your accountant to split the invoice, and check with HMRC if you're unsure.
• Tax disputes in the UK: the return notes call the costs of settling tax disputes disallowable, the business manual disallows appeals to the tribunal or the courts, and the enquiry manual allows the extra accountancy costs of an enquiry that finds nothing more, or only adjusts that year's profits for reasons other than careless or deliberate behaviour. Our reading is that the extra costs of a compliance check may be allowable depending on how it ends, while appeal costs are not; ask an accountant.
• Disputes in the US: the publication and the instructions let you deduct the costs of resolving asserted tax deficiencies for your business, but don't say how to treat the part of a dispute that is about your personal tax. Our reading is that only the business part of those costs goes on the business schedule; ask a tax professional about the rest.
• Disputes in Canada: the professional fees line page lists fees for objections and appeals but says to enter them on the other deductions line of your return, and that page adds fees for help responding to a CRA review. Our reading is that these fees don't go with your business expenses; claim them on the other deductions line, less any reimbursement.
• Splitting an invoice: all three tax offices say to count only the business part, but none of the pages we read say how to split a fee that covers business and personal work. Our reading is that an invoice that lists the work separately is the simplest record; otherwise use a reasonable method you can explain.
• The capital property example in Canada: the professional fees line page gives a boat or fishing material as its example, because the same pages serve fishers. Our reading is that the rule isn't limited to fishing: fees for buying equipment, a vehicle or a building are added to its cost.
• Canada's bulletin: the CRA pages still point to a bulletin on legal and accounting fees that is archived and won't be updated. Our reading is that the current CRA pages come first and the bulletin is background only.
• HMRC's manuals: they are internal guidance for HMRC staff, their pages carry page dates years old, and the enquiry page refers to a Tax Bulletin from decades ago. Our reading is that GOV.UK's public pages are the starting point and the manuals explain HMRC's approach; check with HMRC or an accountant.
• Buying equipment under UK cash basis: GOV.UK's legal and financial costs page points traditional accounting to capital allowances for the legal costs of buying property and machinery, but doesn't say what cash basis users do with them. Our reading is that this isn't settled by the pages we read; ask an accountant.
• Page dates and editions: the IRS publication and instructions are the editions for the latest tax year, and the CRA guide is its latest edition; GOV.UK's expenses pages and HMRC's manual pages carry older page dates. Our reading is that the rules above are current, but check the live pages and later editions before you file.
• What we did not check: the costs of starting a business or forming a company; legal fees for a lawsuit, a contract dispute or collecting money a client owes you; information returns you may have to file when you pay an adviser; fines and penalties beyond the GOV.UK line above; fee protection insurance; VAT, GST/HST and sales tax on advisers' fees; employees, partnerships and companies; the short self-employment pages line by line; US state rules; Quebec and provincial rules; other countries' rules.

When to get advice

• an adviser's invoice mixes work for your business with your personal tax affairs or other personal matters;
• you're paying for help with a tax audit, compliance check, review, objection or appeal;
• a fee relates to buying equipment, a vehicle or property, or to starting or selling a business;
• you were reimbursed or awarded any of your fees;
• a legal fee is for a dispute with a client or someone else;
• you have a partner or a company, or you're registered for VAT, GST/HST or sales tax.

Talk to an accountant or a tax adviser in your country. This page is general information only.

Related

• Freelance expense tracking
• Schedule C for US freelancers
• UK Self Assessment for freelancers
• Canadian self-employment statement for freelancers
• Tax audits and compliance checks
• Buying equipment as a freelancer
• Business insurance

Sources

• United States: IRS: Publication 334 (2025), Tax Guide for Small Business, page date 30-Apr-2026 · IRS: Instructions for Schedule C (Form 1040) (2025), page date 30-Apr-2026
• United Kingdom: GOV.UK: Expenses if you're self-employed, page date 2024-11-08 · GOV.UK: Expenses if you're self-employed, legal and financial costs, page date 2024-11-08 · HMRC: Self-employment (full) notes (Tax year 6 April 2025 to 5 April 2026 (2025–26), PDF) · HMRC: BIM46405 - Specific deductions: professional fees: general principles, page date 2016-04-01 · HMRC: BIM46450 - Specific deductions: professional fees: taxation account & negotiations, page date 2016-04-01 · HMRC: BIM46455 - Specific deductions: professional fees: tax, rating & VAT appeals, page date 2018-12-14 · HMRC: EM3981 - Concluding an Enquiry: Accountancy Expenses Arising out of Enquiries, page date 2017-03-10
• Canada: CRA: Expenses section of Form T2125, page date 2026-08-31 · CRA: Line 8860 – Professional fees (includes legal and accounting fees), page date 2026-08-31 · CRA: Guide Self-employed Business, Professional, Commission, Farming, and Fishing Income: Chapter 3 – Expenses, page date 2026-04-16 · CRA: Line 23200 – Other deductions, page date 2026-01-20 · CRA: IT99R5-CONSOLID ARCHIVED - Legal and Accounting Fees, page date 2000-12-06

Checked 2026-10-20. Found a mistake? Tell us via Support.