Sometimes clients or prospective clients ask if their legal fees are tax-deductible. While we represent clients in disputes with the IRS and North Carolina Department of Revenue, we are not tax advisers. This article on Findlaw does provide guidance for those who incur legal fees in the areas of law that our firm practices:
- Assisting in collections. If you paid a lawyer to help your business collect on unpaid bills, those legal fees can probably be deducted as a business expense.
- Tax advice and counsel. If you paid for business-related tax advice, you can probably deduct those legal fees as well. This also includes hiring a lawyer to defend your small business against IRS and state tax actions.
If you and your tax adviser determine your legal fees are deductible, contact our bookkeeper for any necessary documentation.
This document is intended as an informational reminder and does not constitute legal advice. If you have any questions or would like to discuss a particular situation, please contact the author. The purpose of this document is to provide general information about North Carolina legal issues and should not be construed as legal advice on any specific facts and circumstances.