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Can I Deduct My Divorce Attorney's Fees?

Unlike attorney fees incurred in the course of running a business, which may be written off as business expenses and excluded from the business's taxable income, personal attorney fees are generally not tax deductible. This principle is, unfortunately, likely hold true for the majority of the attorney fees you incur during a divorce or dissolution; however, depending on the facts and circumstances of your case, a portion of your divorce attorney's fees may ultimately be deductible.

The IRS allows individuals to deduct attorney fees incurred in attempting to produce or collect taxable income. In the divorce context, this means that you may be able to deduct fees incurred in attempting to secure an award of spousal support, which is typically taxable income to the recipient. Note that fees incurred in attempting to secure only child support will not be deductible as child support is not taxable income. You may also be able to deduct fees incurred for tax advice you receive related to your divorce.

Property, spousal support, and child support matters are often addressed simultaneously during the negotiation process, and will often be tried at the same time if your case proceeds to trial. As such, it can be difficult to determine exactly which fees were incurred in attempting to secure taxable income and which were not; however, your attorney should keep track of his or her time spent addressing spousal support and tax issues. Upon request, your attorney should provide you with a letter or statement providing an estimate as to the amount of time spent addressing spousal support or the production of other forms of taxable income, as well as giving tax advice. You should then bring this information to your accountant so they can determine how much of your fees, if any, may be tax deductible, and ensure that your returns are in compliance with the Internal Revenue Code and reduce your risk of audit.

Continue to follow our blog monthly for more tips, information and insights on all things related to Ohio and Kentucky family law from Phyllis G. Bossin & Associates, L.P.A.

Sources:

-IRS Publication 529 https://www.irs.gov/pub/irs-pdf/p529.pdf

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Phyllis G. Bossin & Associates, A Legal Professional Association
105 East Fourth Street
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Cincinnati, OH 45202

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