Divorces can be expensive and often bring about significant changes to your finances. If you are going through a divorce, you may be wondering if any of the costs associated with it, such as court and attorney fees, are tax deductible.
In general, the IRS does not allow costs associated with a divorce to be deducted from your income. Legal advise, legal counseling and the like are not considered qualifying expenses.
However, the costs associated with collecting spousal support payments are considered qualifying expenses. Spousal support, also called alimony, and some forms of family, also called undifferentiated, support, is considered taxable income to the spouse receiving the support. Spousal support payments are also tax deductible for the spouse paying them.
So the costs, usually accrued by the wife, to enforce and collect spousal support, which is taxable income, can be deducted from the collecting spouse’s income. Like costs associated with preparing and filing income taxes, the costs associated with obtaining rightful income are too. Similarly, the costs of tax preparation and filing during and after the divorce may be deductible as well. This may be especially helpful, as your taxes will likely become more complex as a result of the divorce.
It is highly advisable you consult with a tax professional, preferably with experience in divorce tax planning; to ensure you file correctly and can take advantage of any tax breaks available to you. Luckily, the cost of this can be deducted. A skilled family law attorney should be able to provide you some cursory guidance on the tax implications of divorce as well.
It is important to note that costs associated with obtaining any support that is not taxable to the receiver is not deductible. For example, costs associated with obtaining and enforcing a child support order, because child support is not taxable income, are not qualifying deductions. Remember, in most cases you do not need an attorney to get a divorce. It is certainly advisable in many cases however you have the right to self-represent yourself during a divorce. Many people can self-represent themselves quite well while others may feel more confident with an experienced attorney on their side. Because an attorney is considered more of a convenience service than a necessity, the costs associated with a divorce are, in most cases, not tax deductible.
Are you in the Los Angeles County area and have questions about the tax implications of your divorce? Attorney Mark H. Karney can help you identify any tax breaks you may be qualified for and can ensure you the best possible financial outcome from for your divorce. A Certified Family Law Specialist, Mark H. Karney has experience handling complex and high-asset divorces in Los Angeles, Pacific Palisades and Beverley Hills areas. Contact our office at 310-622-9434; email us at email@example.com or contact us through our online form to schedule a free consultation today.