Tax Tip

Deducting Divorce Lawyer Fees...

A divorce lawyer's fees is deductible to the extent it applies to securing alimony.

Most legal fees related to divorce are nondeductible personal expenses. But legal fees incurred to receive taxable income are deductible--and alimony is taxable to the spouse who receives it.

To obtain an alimony-related deduction, get an itemized bill from your attorney showing the portion of the total fee attributable to alimony-related work.

Limit: Legal fees are miscellaneous expenses, and deductible only to the extent they exceed 2% of AGI.

Keep accurate records and you will pay less out in taxes each year. By increasing your deductions on several things you will notice this at tax time.

This tip is a starting point for limiting your taxes. All the information is not included here due to space limitations. Always consult a professional before using a tax tip. These tips should be used to ask your CPA or investment advisor about.

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Last modified: April 15, 2003