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Before 2018, tax preparation could be deducted. Most commercial services used it as part of their marketing, suggesting it was "free" because it could be deducted.

After the (doubly ironically named) Tax Cuts and Jobs Act (TCJA) that deduction was removed. But most closed source and online services continue to suggest they are free for the categories which can deduct costs for preparation of Schedule C, E, or F (i.e. the business portion of the tax workload).

Which leads me to raise the question, if one donates money to open source software (or non-profit offering tax preparation support) so that it can exist, is this analogous to a business expense for tax preparation?

Can donations to opensource, which one uses exclusively for tax preparation, be deducted in these same conditions? And how does this play with the regular donations deductions?

Sched C, L17 II, contains "Expenses" for "legal and professional services". Which is what commercial services recommends to use for offsetting their own cost. The IRS also recommends this line for "tax dispute costs" and anything else related to tax. For farmers the same observations apply to Sched F, L32. For Sched E it's a little more complicated as with anything related to Sched E, but the same deductions are possible.

Another consideration for open source/non-profit, is that parts of it can be free (i.e. no donation was made), So the full amount of the donation can be attributed to the relevant permitted Schedule preparation. Which is not the case with closed source, since you are required to pay a bundle price for personal tax and the relevant commercial portions, you must claim on the business Schedules only a proportion of the total cost.

Are those assumptions correct? If so, what are the limits that can be deducted and would it be legal to push that message on donation drives for relevant software projects?

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Most commercial services used it as part of their marketing, suggesting it was "free" because it could be deducted.

I've never actually seen such a claim and it has never been true. Deductible expenses are still expenses, and before TCJA tax preparation expenses were deductible as miscellaneous expenses. I.e.: only people who itemize deduction could deduct them, and only the portion of the total misc. expenses above 2% of their AGI. That rendered tax preparation expenses non-deductible to almost anyone. See the IRC Sec. 67.

But most closed source and online services continue to suggest they are free for the categories which can deduct costs for preparation of Schedule C, E, or F (i.e. the business portion of the tax workload).

Again, deductible expense is still an expense, it's not free.

if I donate money to open source software (or non-profit offering tax preparation support) so that it can exist, is this analogous to a business expense for tax preparation?

No, charitable gifts are just that - gifts. You can deduct charitable contributions on your schedule A, if they're qualified contributions to qualified charities, you're itemizing, and up to a certain limit. Part of the qualification is a contemporary acknowledgement from the charity that no goods or services were provided. See the IRC Sec. 170.

Sched C, L17 II, contains "Expenses" for "legal and professional services". Which is what commercial services recommends to use for offsetting their own cost. The IRS also recommends this line for "tax dispute costs" and anything else related to tax.

No, they don't and it doesn't. Schedule C is for self-proprietor's business expenses. Only if the dispute with the IRS is about a business expense is the cost of the dispute a business expense.

Another consideration for open source/non-profit, is that parts of it can be free (i.e. no donation was made), So the full amount of the donation can be attributed to the relevant permitted Schedule preparation. Which is not the case with closed source, since you are required to pay a bundle price for personal tax and the relevant commercial portions, you must claim on the business Schedules only a proportion of the total cost.

This conjecture I just don't understand. I'm not sure I was able to follow your jump from a charitable contribution to a business expense.

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