Can You Deduct Divorce Attorney Costs?

When a petition for dissolution of marriage is filed, it is common to request that the spouse being served pays the attorneys' fees and costs, especially if the spouse filing does not have an income. Attorneys' fees and costs can take a big chunk out of your savings account or retirement.

Significance

If one spouse cannot afford to pay attorneys' fees and costs, often the court will order the other spouse to pay them. If a state is not a no-fault state, the spouse who committed the fault may also be liable for attorneys' fees and costs.

Time Frame

Attorneys' fees and costs are normally paid to the attorney prior to the start of the case. If you are ordered to pay them for your spouse, you could be ordered to pay them at any point during the divorce proceedings. If not, they will be part of the final judgment and are due within a specified amount of time. The time will be specified in the final judgment and is up to the court.

Identification

Attorneys' fees and costs include the initial retainer, any amount paid as an additional retainer, any amount paid to refurbish the retainer and any costs incurred by the attorney. Costs include the filing fee for your divorce, postage, mediation fees and copies.

Effects

In most cases, attorneys' fees and costs are not deductible. Always check with a local attorney for your state's rules. In some states, if attorneys' fees and costs are ordered as part of an alimony settlement, since alimony is deductible on the federal return, the fees can then be deducted. The order or final judgment on fees and costs must specify that they are to be used as part of the alimony settlement.

Benefits

If your state allows attorneys' fees and costs to be counted toward alimony, and alimony is deductible on your federal return, you will get the tax break on the alimony while your spouse must claim the alimony and pay taxes on it. The only benefit of this is that alimony is not counted as income for you, but is for your spouse. In some states, alimony also affects the amount of child support paid in the case, which may or may not benefit you.

Warning

All states are different in how they handle alimony, attorneys' fees and costs and child support. Always consult an attorney if you have questions regarding alimony and child support. This article was not written by an attorney and therefore should not be considered legal advice.