Generally, legal fees are not deductible. However, you may be able to write off money you spend for tax or investment advice. Thus, when you work with a lawyer on a complex issue such as a divorce, ask for a bill that spells out specific amounts for tax and investment advice.
Keep in mind, though, that tax and investment advice are considered miscellaneous itemized deductions. Miscellaneous deductions (which include other types of outlays, such as work-related education expenses) are deductible only to the extent they exceed 2 percent of your adjusted gross income (AGI).
Suppose, for example, your AGI this year is $60,000 and you spend $2,000 on miscellaneous items. The first 2 percent of your AGI ($1,200) is not deductible so your deduction is limited to the excess $800. What’s more, if you’re subject to the alternative minimum tax (AMT), miscellaneous deductions are not deductible.
