What types of attorney fees can I write off on my tax return?

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Question:

What types of attorney fees can I write off on my tax return?

Answer:

Some attorney fees are eligible for deduction from your annual tax return. The IRS states the simple, general rule that any attorney fee may be deducted if the attorney's services are being used either to produce or collect taxable income, or for help with a tax refund.

A few examples of situations when deducting fees for an attorney would be appropriate are:

  • If you take your ex-spouse to court to collect alimony (which is considered taxable income), and you require the services of a lawyer 
  • If you use an attorney's advice for filing your taxes 
  • If you use a lawyer to defend yourself on a work-related matter (anything that affected your income) 
  • Attorney advice on inheritances, estates, settlements, or any other types of taxable income

Essentially, if the situation in which you're working with the attorney involves money on which you should be paying taxes, those attorney fees are probably tax-deductible. This same rule applies to other professions, too: for example, an accountant you use to file your taxes should inform you that his or her fee for the return itself is deductible, too. The IRS is seeking to make the cost of any professional help you seek regarding your taxable income deductible in an effort to ensure your totals are properly reported, taxed, and accounted for.

If you are ever in doubt about whether fees for a given type of legal service are tax deductible or not, the best thing to do would be to either ask your attorney or to get help from a qualified tax lawyer who can provide you with a detailed answer specific to your situation. 

References:

LA-NOLO1:DRU.1.6.5.20141022.29090