What You Need to Know About Deducting Lawyer Fees for Divorce in California
Getting a divorce can be expensive, especially with added costs like lawyer fees. Here’s what you need to know about whether or not you can deduct lawyer fees for divorce in California.
The Internal Revenue Service (IRS) allows for certain legal fees to be deducted. In general, legal fees that fall in this category include fees related to one’s business. Personal legal fees, including those incurred in a divorce lawsuit, are not tax-deductible.
Which Legal Fees Are and Aren’t Deductible?
Generally, legal fees related to one’s business are eligible for deductions, including rental properties. For instance, fees related to necessary expenses for one’s business, for resolving tax issues, or for rentals or royalties on properties for which one owns income are included in legal fees that are deductible, according to the IRS.
Legal fees that are related to personal issues are not eligible for deductions. According to the IRS, these fees include the following:
- Child custody
- Purchasing real estate
- Civil or criminal charges related to personal relationships
- Personal injury
- Property claims or settlements
- Divorce
How to Decrease Costs of a Divorce
While legal fees for a divorce are not deductible, one may be eligible to deduct attorney fees associated with receiving alimony, or financial support to be paid to a spouse that is ordered by the court, or receiving property from the divorce, as they would increase the individual’s taxable income.
Related: Attorneys’ Fees & Sanctions: California Family Code 271
An individual may also be able to deduct lawyer fees used for tax advice in relation to their divorce.
Additionally, another way to save money on divorce is by filing an uncontested divorce, in which both spouses come to an agreement on the terms of their divorce. One party files a summons and petition to the court, to which the other responds and agrees with the petition. This type of divorce is fast and can save money on legal fees.
Related: How to Get an Uncontested Divorce in California
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If you have any more questions about whether or not you can deduct lawyer fees for divorce in California, contact us. Get your free consultation with one of our experienced divorce attorneys!