Divorce Legal Fees: Can You Deduct Them on Taxes?

Divorce is never easy—emotionally, financially, or legally. With rising divorce rates worldwide, many individuals are left wondering about the financial implications, particularly when it comes to tax deductions. One of the most common questions is: Can you deduct divorce legal fees on your taxes? The answer isn’t straightforward, but understanding the nuances can save you thousands of dollars.

Understanding Tax Deductions for Divorce Expenses

The IRS has strict guidelines on what qualifies as a deductible expense. Generally, personal legal fees, including those related to divorce, are not deductible. However, there are exceptions where certain divorce-related expenses may qualify.

Legal Fees Related to Alimony (Spousal Support)

Before the Tax Cuts and Jobs Act (TCJA) of 2017, alimony payments were deductible for the payer and taxable for the recipient. Post-TCJA, this changed—alimony is no longer deductible for divorces finalized after December 31, 2018. However, if your divorce was finalized before this date, you might still qualify for deductions.

Legal fees incurred to secure or modify alimony may be deductible if they meet IRS criteria. The key is proving that the fees were directly tied to taxable income generation (e.g., ensuring alimony payments are properly structured).

Legal Fees for Tax Advice

If your divorce attorney provides specific tax advice—such as structuring asset division to minimize capital gains—those fees may be deductible under IRS Publication 529 (Miscellaneous Deductions). However, this only applies if you itemize deductions, and miscellaneous deductions are currently suspended under TCJA until 2026.

Legal Fees for Business or Investment Asset Division

Divorces involving business ownership, real estate, or investments can be complex. If legal fees are incurred to protect or secure income-producing assets, they may qualify as deductible expenses. For example:

• Fees related to dividing a family business
• Legal costs for transferring investment properties
• Expenses tied to retirement account division (e.g., QDROs)

These deductions fall under "production of income" expenses (IRC § 212), but again, itemizing is required.

What Divorce Expenses Are Never Deductible?

Not all divorce-related costs can be written off. The IRS explicitly prohibits deductions for:

• Child custody or support negotiations
• Fees for filing divorce papers
• Personal legal advice unrelated to taxes or income
• Emotional distress claims

How to Claim Deductible Divorce Legal Fees

If you believe your legal fees qualify for deductions, follow these steps:

1. Request an itemized bill from your attorney – Ensure fees are broken down by service (e.g., "tax advice" vs. "custody agreement").
2. Keep detailed records – Save all receipts, invoices, and correspondence.
3. File Schedule A (Itemized Deductions) – Report eligible expenses under "Other Miscellaneous Deductions" (if applicable).
4. Consult a tax professional – Divorce tax laws are complex; an expert can help maximize deductions.

The Global Perspective: How Other Countries Handle Divorce Tax Deductions

Divorce tax laws vary worldwide. For example:

• Canada: Legal fees may be deductible if tied to spousal support or child support enforcement.
• UK: No deductions for divorce fees, but some tax relief exists for transferring assets.
• Australia: Limited deductions for legal fees related to financial settlements.

In the U.S., the TCJA has made deductions harder, but strategic planning can still yield savings.

Final Thoughts

While most divorce legal fees aren’t deductible, exceptions exist for tax advice, alimony structuring, and asset division. Always consult a CPA or tax attorney to navigate these rules effectively. With proper documentation and expert guidance, you may reduce your tax burden during an already challenging time.