The Cost of Your Divorce Could Save You Money in Taxes

We know it sounds too good to be true. But here’s the thing: in some situations, certain divorce-related legal fees may actually be tax-deductible. Not the whole bill (unfortunately), but if the work your attorney did was tied to specific tax-related issues, the IRS might allow you to write off a portion.

Let’s break it down.

What Might Be Deductible?

We’re not talking about the typical legal fees you pay for divorce like negotiating custody, dividing assets, or just getting the paperwork done. Those are considered personal expenses, and the IRS doesn’t touch them.

But if part of your legal bill was for:

• Securing or enforcing alimony you receive, or

• Getting tax advice related to your divorce settlement, then there’s a chance those fees might be deductible on your federal tax return.

So if your attorney spent time figuring out the tax consequences of your settlement, or helping you collect support payments that count as income, you may be entitled to a deduction for that portion of the bill.

Be sure to get expert advice. 

The attorneys at WOLF know a lot, but we’re not tax attorneys. We know when to recognize tax issues and direct you to a tax expert. We’re family law attorneys. Our job is to help you get through your divorce with your sanity and finances intact, not to interpret the tax code. But this is something we think clients should be aware of – and something that is often missed in many divorces. If this applies to your case, it’s worth having a conversation with your accountant or tax attorney to see if you qualify.

What we can do is provide a clear, itemized invoice that breaks down how our time was spent. That’s exactly what your tax professional needs to evaluate whether any portion of your fees are deductible.

What About New Jersey?

New Jersey generally doesn’t allow deductions for legal fees on your state income tax return. Even if a portion of your fees is deductible federally, that won’t carry over to your NJ return. But the potential federal deduction could still help take the sting out of your legal bill.

Don’t Leave Money on the Table

Most people have no idea this is even an option. Divorce is costly enough, so if you’re eligible for a tax break, you should absolutely take advantage of it. But you won’t know unless you ask.

So:
✅ Talk to your accountant.
✅ Ask your lawyer for an itemized invoice (we’ve got you).
✅ Be proactive.

At WOLF Esquires, we help smart people make smart choices, even when it comes to the financial side of divorce.

If you're in the process of separating and want a legal team that helps you think three steps ahead, let’s talk.

📩 Book a consultation today and let’s make sure nothing (especially a possible tax break) falls through the cracks.