Maybe. It depends on the reason you incurred the fees. You cannot deduct the basic legal fees for divorce or court filing costs. However, you can deduct any fees including legal fees that were paid for tax advice related to the divorce or to help you get taxable alimony or spousal support. These legal fees for divorce are allowable only to the extent that their total in any one year exceeds two percent of adjusted gross income.
Cross Roads Divorce Advisors fees may also qualify under these rules. You should ask your attorney to generate detailed billing showing the portion of the bill related to deductible items.
Check out this article from Divorce Taxation expert Julian Block for more details.
Generally, the IRS says “no” to tax deductions that might ease the pain of divorce. The agency has no sympathy for the legal fees and other costs incurred by a couple who split—whether it’s a divorce, separation or decree of support. In certain circumstances, however, you might be able to salvage a deduction for the portion of expenses specifically allocable to tax advice in connection with a divorce or separation, as well as for legal fees to obtain taxable alimony. Here are some rules that are helpful to know.
Consult your tax preparer before taking any actions that may have tax consequences.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.
Lou Falvo is a Certified Divorce Financial Analyst® and CIMA® (Certified Investment Management Analyst) who assists clients by evaluating the tax and financial aspects of divorce. Lou is dedicated to reducing the burden of each client by thoroughly examining the financial elements of the client’s divorce, with a keen focus on what is in his or her best interests. Contact Lou to find out how he can assist you with your divorce proceedings at lfalvo@crossroadsdivorce.com or (585) 542-2382.