Professional Fees

Under the Tax Cuts and Jobs Act of 2017 many itemized deductions have been eliminated or modified. Tax preparation fees filed as a miscellaneous itemized deduction subject to the 2% floor is eliminated.

Under prior law, generally, you could not deduct personal legal expenses, such as the expense of acquiring, perfecting, or defending your title to property. However, these costs can qualify as capital expenditures, which are added to the basis of the property. No expenses related to tax-free income are ever deductible.

Divorce-Related Fees

Under new tax law, many taxpayers lose the benefit of deducting legal fees for divorce as itemized deductions due to new limitations. Taxpayers who claim the standard deduction in 2019 instead of itemizing will not be able to deduct legal fees.