Are Child Custody Legal Fees Tax Deductible?

  Reviewed by: Ryan Cockerham, CISI Capital Markets and Corporate Finance      Updated November 02, 2018
  Written by: Victoria Lee Blackstone

Sadly, child custody battles cost more than just money. The emotional cost to parents and children often carries a higher price tag and lasts longer than the time it takes to bounce back financially. Still, legal fees can often run up a hefty tab. And on top of legal fees, you'll have other expenses such as time missed from work, which might be without pay, as well as travel time and transportation costs for legal meetings. When the dust settles, you may be hoping for a silver lining in the form of a tax break to help offset your legal fees.

Tips

  • The cost of a child custody case, including all custody-related fees, has never been a tax-deductible expense. That being said, the IRS doesn't leave you entirely without relief. You may be able to claim certain fees that are associated with a divorce, including expenses paid to accountants and other financial professionals with whom you consult regarding tax-related matters.

Child Custody Lawyer Fees

Although the direct costs associated with child custody and divorce proceedings such as attorney fees and court costs are not tax deductions, other indirect fees may qualify. The IRS allows you to claim certain fees that you pay for tax advice concerning your divorce as well as fees you pay to accountants, appraisers and actuaries whom you consult to determine your correct tax liability. Each of these professionals must itemize your bills so the IRS can clearly determine the eligibility of fees as tax deductions.

Deduction Amount Exception

The entire amount of fees you pay is not eligible for a tax deduction. The IRS notes that the fees you can claim as deductions must be greater than 2 percent of your adjusted gross income (AGI). Add all your qualifying fees and subtract 2 percent of your AGI from the fees total. Your AGI is on Line 38 of IRS Form 1040 or Line 37 on Form 1040NR.

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2018 Tax Law

In 2018, as in all years preceding this tax year, fees related to child custody are not deductible. You can only claim allowable legal fees if you itemize your deductions on Schedule A of IRS Form 1040 as "miscellaneous deductions."

2017 Tax Law

2017 was the last year that taxpayers could claim dependency exemptions for their children until 2025 rolls around. If you had custody of your child or children in 2017, claiming a $4,050 dependency exemption for each child reduces your tax liability, particularly since you cannot claim legal fees for child-custody proceedings. Even though the Tax Cuts and Jobs Act of 2017 (TCJA) that eliminated this dependency exemption was passed in December 2017, this will not affect your 2017 taxes, which you file in 2018. You can still claim this exemption on your 2017 tax return.

About the Author

Victoria Lee Blackstone was formerly with Freddie Mac’s mortgage acquisition department, where she funded multi-million-dollar loan pools for primary lending institutions, worked on a mortgage fraud task force and wrote the convertible ARM section of the company’s policies and procedures manual. Currently, Blackstone is a professional writer with expertise in the fields of mortgage, finance, budgeting and tax. She is the author of more than 2,000 published works for newspapers, magazines, online publications and individual clients.

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