+27 Are Tax Attorney Fees Deductible 2018 Ideas

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

Are Tax Attorney Fees Deductible in 2018?

Introduction

When it comes to tax preparation, many people turn to tax attorneys for help. However, the fees associated with hiring a tax attorney can be quite high. Therefore, the question arises whether these fees are deductible on your tax return. In this article, we will explore whether tax attorney fees are deductible in 2018.

What are Tax Attorney Fees?

Tax attorney fees are the fees charged by an attorney for legal advice and representation related to tax issues. These fees can include the preparation and filing of tax returns, representation during an audit, tax planning, and other tax-related services.

Are Tax Attorney Fees Deductible?

The answer to this question is not a simple yes or no. In general, tax attorney fees are deductible as a miscellaneous itemized deduction on Schedule A of your tax return. However, there are certain limitations and restrictions that apply.

Limitations and Restrictions

First, miscellaneous itemized deductions are subject to a 2% floor. This means that you can only deduct the amount of these expenses that exceed 2% of your adjusted gross income (AGI). For example, if your AGI is $50,000 and your miscellaneous itemized deductions are $2,000, you can only deduct $1,000 (2% of $50,000 is $1,000). Second, tax attorney fees are only deductible to the extent that they are related to the production or collection of taxable income or the determination, collection, or refund of any tax. This means that fees related to personal tax issues, such as divorce or child support, are not deductible.

Exceptions to the Restrictions

There are a few exceptions to the restrictions on deducting tax attorney fees. First, fees related to a business or rental property are fully deductible as a business expense. Second, fees related to tax planning and advice are fully deductible. Finally, fees related to tax issues that resulted from a casualty loss, such as a natural disaster, are fully deductible.

Conclusion

In summary, tax attorney fees are generally deductible as a miscellaneous itemized deduction on Schedule A of your tax return. However, there are limitations and restrictions that apply. It is important to keep detailed records of your tax attorney fees and to consult with a tax professional to ensure that you are taking advantage of all available deductions. If you have any questions about whether your tax attorney fees are deductible, consult with a qualified tax professional.

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