Review Of Can Are Tax Attorney Fees Deduct References

When are attorney fees tax deductible On what basis? from thelawadvisory.com

Can You Deduct Tax Attorney Fees?

Introduction

As a taxpayer, you may have to hire a tax attorney to help you with your tax issues. However, the question of whether you can deduct the fees you pay to your tax attorney is a common one. In this article, we will discuss whether tax attorney fees are deductible and under what circumstances.

What are Tax Attorney Fees?

Tax attorney fees are the fees that you pay to a tax attorney for their services. These services may include representing you in an audit, negotiating with the IRS on your behalf, or providing tax advice.

Are Tax Attorney Fees Deductible?

In general, tax attorney fees are deductible if they are related to the production or collection of income, or if they are related to the determination, collection, or refund of any tax. However, there are certain limitations to this deduction.

Limitations on Deductibility

Firstly, the deduction for tax attorney fees is subject to the 2% miscellaneous itemized deduction floor. This means that you can only deduct the fees that exceed 2% of your adjusted gross income (AGI). Secondly, if you receive a settlement or award from the IRS, any legal fees paid in connection with that settlement or award are not deductible. Finally, if you hire a tax attorney for personal reasons, such as a divorce or a criminal case, the fees are not deductible.

When Can You Deduct Tax Attorney Fees?

You can deduct tax attorney fees if they are directly related to the production or collection of income. This includes, but is not limited to, the following: - Preparing and filing tax returns - Responding to IRS notices - Representing you in an audit - Negotiating with the IRS on your behalf - Providing tax advice related to your business

How to Claim the Deduction

To claim the deduction for tax attorney fees, you must itemize your deductions on Schedule A of Form 1040. You will also need to keep detailed records of the fees you paid and the services provided by your tax attorney.

Conclusion

In conclusion, tax attorney fees are generally deductible if they are related to the production or collection of income, or if they are related to the determination, collection, or refund of any tax. However, there are certain limitations to this deduction, including the 2% miscellaneous itemized deduction floor and the non-deductibility of fees related to personal matters. To claim the deduction, you must itemize your deductions on Schedule A of Form 1040 and keep detailed records of the fees you paid and the services provided by your tax attorney.

Share :