Can I Deduct Lawyer Fees for Divorce?
Life can get complicated on us in a hurry, and before we know it, we’re in over our heads. This is especially true for a thing like a divorce. Nobody goes into marriage thinking that this day is coming. We marry because we’re in love, and every couple thinks they’re going to make it and not end up like those others. Unfortunately, about half of all married couples today end up going through a divorce, and this can really pile the stress on like nothing else you’ve experienced. You have finances at stake, properties, and perhaps even children and questions of custody. There are also no guarantees. Just because you’re the mother doesn’t mean you will “win” in the divorce, and just because you weren’t the one filing doesn’t mean you won’t be taken to the proverbial cleaners.
This is why hiring a divorce lawyer is extremely important for these situations. Though these lawyers are not free by any means. You will have to go into your pockets and fund your own council for a divorce, and this adds another layer of stress for many people. However, there’s a rumour floating around that these lawyer fees can be deducted when you file your taxes. Is this true?
The Tax Laws Concerning Lawyer Fee Deductions
The answer here is fairly complicated. It’s a “yes” in some situations while being a “no” in most others. Let’s start with the hard no first. No, unfortunately, you cannot write your lawyer fees off as a deduction in most cases when going through a divorce. The Crown’s tax laws indicate that this is a personal expense, not something deemed necessary like a business expenditure. Think of it like purchasing a work truck vs. purchasing a sports car. The work truck has use, so you can write it off as necessary. The sports car is a personal purchase. Tax law views your divorce, regardless of the circumstances, as a personal choice. Your marriage was a personal choice, so the tax laws reflect this in a divorce.
Though if we flip that coin over, we will find that sometimes you can, in fact, deduct lawyer fees. Let’s say that you’ve “won” the divorce, so to speak. You’re receiving alimony and child support, and the court deems you as a dependent of your former spouse, and thus you need to be provided for. In this instance, the tax law suggests that you didn’t have the means to necessarily hire a lawyer, and thus you may be entitled to a refund or a tax break. However, these waters are a little muddy, and there are no guarantees. For instance, if you’re the one who filed yet still received the alimony and support, your case may be viewed as voluntary, like the sports car, so no deduction.
Saving Money in a Divorce
Because the likelihood of you receiving a deduction for a divorce lawyer is so slim, the best thing you can do is to save money on your divorce proceedings to start out with. Here are some ways that you can save money in the divorce.
Finding the Right Lawyer
The first step is to find the right divorce attorney to assist you. While a better lawyer is going to cost more upfront, keep in mind that you’re far less likely to have to pay high rates of alimony or child support and less likely to lose property, so you’re still saving big in the long run.
You may fight like cats and dogs, you and your spouse, and that may be why divorce is needed. However, you have to suck it up, swallow your pride, and ignore that anger. Being cordial with your spouse is going to keep them calm and cordial as well. This way, you don’t get that spouse who’s “out for blood.” You have two people who just want to move on, not fight anymore.
Offering to Negotiate, Not Demanding
You can’t go into a divorce demanding things and openly trying to walk away with everything. Allow your lawyer to do the negotiating while you remain peaceful. Being willing to let go of some things might save you from having to lose it all.
No matter what your situation is, you need a good divorce attorney to help you through it. Seek the best family lawyers in your area for assistance.