Interest, Investment, Money Transactions
(Alimony, Bad Debts, Applicable Federal Interest Rate,
Gambling, Legal Fees, Loans, etc.)
This is archived information that pertains only to the 2002 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
I went through a divorce last year and paid a lot of legal fees. Are these deductible on my tax return?
Legal fees incurred or paid for a divorce are personal in nature, and are not generally deductible. However, legal fees incurred or paid for the production or collection of taxable income may be deductible. You may deduct legal fees for collecting alimony because alimony is taxable income. These deductions are taken on line 22 of Form 1040, Schedule A (PDF), Itemized Deductions. For additional information, refer to Tax Topic 508, Miscellaneous Expenses, and Publication 529 (PDF), Miscellaneous Deductions.
References: Can I deduct alimony paid to my former spouse?
If you are divorced or separated, you may be able to deduct the alimony or separate maintenance payments that you are required to make to your spouse or former spouse, or on behalf of that spouse. For additional information, refer to Tax Topic 452, Alimony Paid (this topic covers alimony under decrees or agreements after 1984; and Publication 504 (PDF), Divorced or Separated Individuals.
References: 4.5 Interest, Dividents, Other Types of Income: Alimony, Child Support, Court Awards, Damages Are alimony payments considered taxable income?
Alimony, separate maintenance, and similar payments from your spouse or former spouse are taxable to you in the year received. The amount is reported on line 11 of Form 1040 (PDF). You cannot use Form 1040A (PDF) or Form 1040EZ (PDF). Refer to Tax Topic 406, Alimony Received, or Publication 504 (PDF), Divorced or Separated Individuals.
To help determine if these payments are or are not alimony, please read the following:
The following rules apply to payments under divorce or separation instruments executed after 1984. They also apply to instruments that were modified after 1984 to:
- Specify that these rules will apply or
- Change the amount or period of payment or to add or delete any contingency or condition.
For the rules for alimony payments under pre-1985 instruments, please see Publication 504 (PDF), Divorced or Separated Individuals.
A payment to or for a spouse or former spouse under a divorce or separation instrument is alimony, if the spouses do not file a joint return with each other, if the following conditions are met:
- The payment must be made by cash, check, money order, etc.
- The instrument does not designate the payments as "not alimony."
- The spouses are not members of the same household at the time the payments are made.
- There is no liability for payments after the death of the recipient spouse.
- The payment is not treated as child support.
For an explanation of these requirements please see, Publication 504 (PDF), Divorced or Separated Individuals.
References: - Publication 504 (PDF), Divorced or Separated Individuals
- Form 1040 (PDF), U.S. Individual Income Tax Return
- Form 1040A (PDF), U.S. Individual Income Tax Return
- Form 1040EZ (PDF), U.S. Individual Income Tax Return for Single and Joint Filers with No Dependents
- Tax Topic 406, Alimony Received
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