Legal Fees that are Tax Deductible in Family Law Matters
No one looks forward to paying out large sums of money to lawyers, however being able to deduct the expense on your income tax return, definitely softens the blow. So when are legal fees deductible in the context of a family law matter?
Legal fees associated with the breakdown of the relationship are deductible only in the following circumstances:
- To establish a right to child or spousal support under the Divorce Act or the Family Law Act;
- To increase the amount of child or spousal support under the Divorce Act or the Family Law Act;
- To enforce an existing court order or written agreement to collect late spousal or child support;
- To resist the payor’s attempt to reduce spousal or child support;
- To make child support non-taxable under the Child Support Guidelines.
In general terms, whenever you can deduct an amount for legal fees, you must include as income, any later award that repays you for all or part of those fees.
Information Available Through The CRA
The CRA has an interpretation bulletin IT-99R5 entitled “Legal and Accounting Fees” which is a helpful read that outlines when both legal and accounting fees are deductible to a tax payor.
The members of the Low Murchison Radnoff LLP family law practice group offer a complete range of services to meet your family law needs. Our lawyers also encourage alternative dispute resolution techniques offering services as mediators, arbitrators and collaborative lawyers.
We look forward to meeting your needs and sharing our expertise with you
Beverley Johnston Partner Direct Line: 613-296-3910 | T: 613-236-9442 F: 613-236-7942 | TF: 888-909-9442 1565 Carling Avenue, Suite 400 | Ottawa | Canada K1Z 8R1 bjohnston@lmrlawyers.com
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