Can I deduct my personal attorneys fees from my tax bill?

Answer 1

It depends on what they are for. Check out the list below.

http://www.irs.gov/publications/p529/ar02.html

You can usually deduct legal expenses that you incur in attempting to produce or collect taxable income or that you pay in connection with the determination, collection, or refund of any tax.

You can also deduct legal expenses that are:

Related to either doing or keeping your job, such as those you paid to defend yourself against criminal charges arising out of your trade or business,

For tax advice related to a divorce if the bill specifies how much is for tax advice and it is determined in a reasonable way, or

To collect taxable alimony.


You can deduct expenses of resolving tax issues relating to profit or loss from business (Schedule C or C-EZ), rentals or royalties (Schedule E), or farm income and expenses (Schedule F) on the appropriate schedule. You deduct expenses of resolving nonbusiness tax issues on Schedule A (Form 1040 or Form 1040NR). See Tax Preparation Fees, earlier.

Unlawful discrimination claims. You may be able to deduct, as an adjustment to income on Form 1040, line 36, or Form 1040NR, line 34, rather than as a miscellaneous itemized deduction, attorney fees and court costs for actions settled or decided after October 22, 2004, involving a claim of unlawful discrimination, a claim against the U. S. Government, or a claim made under section 1862(b)(3)(A) of the Social Security Act. However, the amount you can deduct on Form 1040, line 36, or Form 1040NR, line 34, is limited to the amount you included in gross income in 2006 for that claim. The rest of your attorney fees and court costs for this type of claim are deductible as a miscellaneous itemized deduction subject to the 2% limit. See Publication 525 for more information.

Answer 2

Only if they are:

Related to the production of taxable income.

The collection of taxable income.

Related to preparation and filing of tax returns including advice on tax law or defending you in Tax Court.

For processing an adoption.