Professional Fees

On your personal return, you may deduct any fees you pay for tax planning purposes, as well as necessary professional fees related to taxes imposed by any level of domestic or foreign government. This includes tax advice, tax return preparation, and estate planning services. Because the fees are considered miscellaneous expenses, they are subject to the 2% of AGI limitation.

Generally, you cannot deduct personal legal expenses, such as the expense of acquiring, perfecting, or defending your title to property. However, these costs can qualify as capital expenditures, which are added to the basis of the property. No expenses related to tax-free income are ever deductible.

Divorce-Related Fees

Legal fees for divorce may be deductible by the party seeking taxable income, such as alimony, or property giving rise to taxable income, such as a business interest. Be sure to get such details stated on separate invoices to support the deduction.