Can you deduct legal fees for estate planning on your income taxes?

While estate planning fees generally are not deductible on your income tax returns, they may be deductible or partially deductible for the following reasons:

  1. If the fee is considered a business expense.
  2. If the fee is an expense for the production or collection of income, for the management, conservation, or maintenance of property held for the production of income, or in connection with the determination, collection, or refund of any tax.

Under item 2 above, you may be able to deduct a portion of the legal fees if they relate to tax planning.

If this applies to you, the lawyer you are working with may be able to estimate the portion of your legal fees that relate to tax planning. It is also a good idea to discuss this with your accountant to determine what is appropriate in your specific situation. For some of you, tax planning may be one of the most important aspects of your estate plan, so it doesn't hurt to ask!