The Tax Cuts and Jobs Act changes the rules about deducting certain subscriptions.
By Stephen Fishman, J.D. · USC Gould School of Law
Subscriptions to magazines, newspapers, journals, newsletters, and similar publications can be a deductible expense. This includes Internet-based subscriptions for websites. However, due to changes in the tax laws brought about by the Tax Cuts and Jobs Act, they are deductible only if purchased for a business.
Subscriptions for Your Business
If you own a business, subscriptions to professional, technical, and trade journals that deal with the business are deductible as a business expense. Make sure the subscription is related to your business. This is a matter of common sense. For example, an accountant could deduct the cost of subscribing to the CPA Journal, but not to a daily newspaper or general interest magazine. On the other hand, a freelance journalist could deduct subscriptions to newspapers and magazines to which he or she has, or wishes to, sell articles.
If you prepay for a subscription for more than one year, you must prorate the cost for each year. You can do this by determining what you pay per month for the subscription. For example, if you pay $240 for a two-year subscription that starts in July, you may deduct $10 per month over the life of the subscription. You would get a $60 deduction the first year, a $120 deduction the following year, and a $60 for the final six months of the subscription.
Other Subscriptions Are Not Deductible
Before 2018, it was possible to deduct subscriptions even if they were not purchased for a business. For example:
- subscriptions to investment newsletters or magazines were deductible as an investment expense
- if you worked as an employee and you subscribed to publications useful for your work and your employer did not reimburse you for the cost, you could deduct the cost as an unreimbursed employee expense
- if you were looking for a job and you subscribed to publications to aid you in your search, you could deduct the expense as a job search expense, and
- if you had a hobby for which you subscribed to a publication, the cost was deductible against any income you earned from the hobby.
However, these expenses were deductible only as miscellaneous itemized deductions, which means they were deductible only if, and to the extent, that they, along with your other miscellaneous itemized deductions, exceeded 2% of your adjusted gross income.
Unfortunately for people who pay for expensive subscriptions, the Tax Cuts and Jobs Act enacted by Congress in 2017 completely eliminates all miscellaneous itemized deductions subject to the 2% of AGI threshold, including those for investment expenses, unreimbursed employee expenses, job search expenses, and hobby expenses. Thus, subscriptions purchased for these purposes are no longer deductible. The prohibition on deducting these expenses went into effect for 2018 and continues through 2025. These deductions are scheduled to return in 2026.
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