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Tax Deduction Consulting: Attorney Fees Lahaina HI

All attorney fees are not automatically tax deductible. There are some cases where they can be taken as itemized deductions. These cases generally deal with some type of business related or income producing activity. If the legal action is related to your business or your employment, the attorney fees are usually deductible.

Shue C Douglas
(808) 661-3231
425 Ilikahi St
Lahaina, HI
 
James & Associates Cpas Inc
(808) 667-9512
505 Front St Ste 222
Lahaina, HI
 
H & R Block
(808) 935-2799
910 Honoapiilani Hwy Ste 11
Lahaina, HI
 
Cheatham Jon B Cpa Llc
(808) 249-2720
2200 Main St Ste 504
Wailuku, HI
 
Beck Robert Tax And Bookkeeping Service Inc
(808) 242-1553
2070 W Vineyard St
Wailuku, HI
 
Hutchinson Paul M
(808) 244-7902
24 Market St
Lahaina, HI
 
Burstyn & Associates Business Consultants Inc
(808) 661-3961
991 Limahana Pl Ste H4
Lahaina, HI
 
Comte John M
(808) 244-8128
776 Analio St
Wailuku, HI
 
Jmp Svc Inc
(808) 270-2710
811 Kolu St Ste 103
Wailuku, HI

Data Provided by:
Courter Boeckmann & Associates LLC
(808) 871-1880
220 Lalo St Ste 201
Kahului, HI
 
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Tax Deduction Consulting: Attorney Fees

Tax Deductions for Attorney Fees

The general rule for tax deductions for attorney fees is that the legal action has to be related to some type of income producing activity.

All attorney fees are not automatically tax deductible. There are some cases where they can be taken as itemized deductions. These cases generally deal with some type of business related or income producing activity. If the legal action is related to your business or your employment, the attorney fees are usually deductible.

Attorney fees for legal actions between spouses are an example. The fees paid for the separation or divorce action are not deductible because they have nothing to do with income. However, if one spouse is taking legal action to collect taxable alimony payments, the attorney fees for this would be deductible. It would be important to make sure that the attorney separates his bill isolating the part of the bill that is related solely to the collection activity. On the other hand, if a spouse was trying to reduce alimony, the attorney fees would not be deductible as no income is actually produced as a result of the legal action.

Legal fees for personal injury suits are a very good example of this principle. If the personal injury suit results in the payment of taxable income, the attorney fees are deductible from the taxes of the injured party. If the payment is non-taxable, the legal fees are not deductible. If the defender of the personal injury suit is a business, the attorney fees would be a deductible expense because they are business related.

Estate planning is another gray area of tax deductions for attorney fees. To the degree that the attorney fees are related to tax matters or income producing property, they are deductible. Attorney fees for legal actions related to Social Security are also deductible only to the degree that they result in an increase in taxable benefits.

When you are presented with attorney fees, it is a mistake to make an assumption on...

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