It’s January, which means that it is time for your annual tax-deductible attorney’s fees reminder. It is the beginning of tax season, so as you begin to file (or prepare to file), remember that some (or all) of your business attorney’s fees for 2016 may be tax deductible.
Some of the tax-deductible fees include contract drafting and review, incorporation services, commercial litigation fees, and other business law attorney’s fees. Attorney’s fees for work like family law, fiancé visa immigration applications, criminal law, or purchase of real estate to be used as a primary residence are likely not tax-deductible.
In the realm of federal income tax, there are two types of deductions: “Above the line” deductions and “below the line deductions.” Above the line deductions reduce the amount of taxable income. Below the line deductions reduce the actual amount of taxes owed. For obvious reasons, below the line deductions are the better, much “stronger” type of deductions.
A tax attorney or CPA (Certified Public Accountant) would be best suited for answering any questions you might have about tax deductions and whether your deductions qualify as above the line or below the line deductions.
Don’t miss out on tax deductions. Ask your CPA today whether your attorney’s fees from 2016 are tax deductible. Also, make an appointment with an attorney now to deduct the fees from your 2017 taxes.
Nothing in this article should be construed as legal advice or tax advice.