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Tax Deduction Consulting: Attorney Fees Windham ME

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.

Michael John DellOlio (RFC®), JD, MBA
(207) 294-0401
16 Middle Street
Saco, ME
Company
Michael J. DellOlio & Associates, L.L.C.
Qualifications
Education: B.S.,MBA,J.D.,NASD Series 6,7,24,63,65; Maine Insurance License
Years of Experience: 24
Membership
IARFC
Services
Invoice, Estate Planning, Business Planning, Portfolio Management, Trustee Service, Pension Planning, Retirement Planning, Tax Planning, Tax Returns, Employee Benefits, Stocks and Bonds, Mutual Funds, CD Banking, Annuities, Life Insurance, Disability Income Insurance, Long Term Care Insurance, Medical Insurance, BuySell, Compensation Plans

Data Provided by:
Scott Associates
(207) 772-0441
12 Revere St
Portland, ME
 
H & R Block
(207) 773-0221
252 Saint John St
Portland, ME
 
David Thomas & Assoc
(207) 871-0123
477 Congress St Ste 1005
Portland, ME
 
Hutnak Stephen A LLC
(207) 772-1600
100 Middle St Ste 401
Portland, ME
 
Austin Associates PA CPA
(207) 892-6642
183 Us Route 1
Portland, ME
 
Liberty Tax Service
(207) 828-4829
694 Forest Ave
Portland, ME
 
Johnson Virginia M
(207) 772-2322
686 Brighton Ave
Portland, ME
 
Brown Barry J
(207) 879-7000
22 Free St Ste 301
Portland, ME
 
H&R Block
(207) 541-1981
629 FOREST AVE
PORTLAND, ME

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Data Provided by:

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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