Colorado · Investment Advisory Fees Deduction
Investment Advisory Fees Deduction in Colorado (2026)
Investment advisory and management fees are currently suspended for individuals but remain deductible for trusts and estates through 2025. Colorado has a flat 4.4% income tax, so a Colorado filer's combined marginal rate on the next dollar at $82,254 of income is about 26.4% (22% federal + 4.4% CO).
2026 savings example for Colorado
Planning estimate for a single filer earning $82,254 (Colorado median household income in LevyIO's state dataset) who removes $5,000 from taxable income. Federal tax uses the 2026 IRS brackets after the $16,100 standard deduction; CO tax uses the state brackets in LevyIO's dataset and assumes the state follows the federal treatment.
Estimated total savings
$1,320
Federal savings
$1,100
$9,266 → $8,166 · 22% bracket
CO state savings
$220
$2,959 → $2,739 · 4.4% marginal
Combined marginal rate
26.4%
≈ $264 saved per $1,000 deducted
Federal × Colorado marginal rates (2026, single)
Gross-income ranges include the federal standard deduction. The CO column is the state marginal rate at the midpoint of each range. The last column is the tax saved per $1,000 deducted at that combined rate.
| Federal bracket | Gross income (single) | CO marginal | Combined | Per $1,000 |
|---|---|---|---|---|
| 10% | $16,100 - $28,500 | 4.4% | 14.4% | $144 |
| 12% | $28,500 - $66,500 | 4.4% | 16.4% | $164 |
| 22% | $66,500 - $121,800 | 4.4% | 26.4% | $264 |
| 24% | $121,800 - $217,875 | 4.4% | 28.4% | $284 |
| 32% | $217,875 - $272,325 | 4.4% | 36.4% | $364 |
| 35% | $272,325 - $656,700 | 4.4% | 39.4% | $394 |
| 37% | Over $656,700 | 4.4% | 41.4% | $414 |
Eligibility & forms
Investors paying fees for investment management within IRAs or trusts
- Suspended for individuals 2018-2025 under TCJA
- Still deductible for trusts and estates
- Must be paid outside the investment account for IRAs
Federal forms: Schedule A, Form 1041
Colorado filing notes
Federal deductions automatically apply. Watch for TABOR refund checks (taxable federally). Colorado offers retirement income subtractions for 55+ and generous renewable energy credits.
Common mistakes: Trying to deduct personal investment fees under current law; Not using IRA funds to pay fees directly; Missing trust-level deduction opportunities.
Frequently asked questions
How much can the Investment Advisory Fees Deduction save a Colorado taxpayer in 2026?
In LevyIO's example, a single filer with $82,254 of income (the Colorado median household income in our state dataset) who removes $5,000 from taxable income saves about $1,100 in 2026 federal tax (22% marginal bracket) plus about $220 in Colorado tax (4.4% state marginal rate), roughly $1,320 combined. It is a planning estimate computed from the 2026 IRS brackets and LevyIO's CO bracket data, not a survey figure.
What is the Colorado income tax rate for 2026?
Colorado has a flat 4.4% income tax. The CO standard deduction in LevyIO's dataset is $15,000 single / $30,000 married. Flat 4.4%. Uses federal taxable income. TABOR mandates refunds when revenue exceeds limits.
Who qualifies for the Investment Advisory Fees Deduction in Colorado?
Investors paying fees for investment management within IRAs or trusts. The federal rules are the same in every state; the requirements are: Suspended for individuals 2018-2025 under TCJA; Still deductible for trusts and estates; Must be paid outside the investment account for IRAs. Colorado filers should confirm on the CO return whether the state follows the federal treatment.
Which forms do I file to claim the Investment Advisory Fees Deduction?
Federal: Schedule A, Form 1041. Colorado: check the Colorado Department of Revenue instructions for the matching state schedule. Common mistakes: Trying to deduct personal investment fees under current law; Not using IRA funds to pay fees directly; Missing trust-level deduction opportunities.
Investment Advisory Fees Deduction in other states
Sources
Reviewed 2026-09-17. Estimates are educational planning figures computed from the IRS 2026 inflation adjustments and LevyIO's state bracket dataset; they are not tax advice.