The economic impact of a divorce can be severe. However, there are some ways in which you can lower that impact, including through tax deductions.
Tax deductions can lower your taxable income, which in turn reduces the amount of money you must pay to the IRS in your taxes. Some of the rules for deductions changed significantly after the Tax Cuts and Jobs Act of 2017, but there are still some opportunities for divorcing couples to see savings.
First, it is important to note that there are only a few legal fees that are deductible. The IRS does not allow for deduction of the costs of personal legal service, counseling or legal action in divorces. There are circumstances in which a judge may ask your spouse to pay some of your legal fees if they are deliberately increasing the costs of your divorce.
Through 2025, though, individuals who incur legal fees related to business-related income can deduct those fees under Section 212.
Beyond that, the most common deduction is for alimony. If you finalized your divorce on or before December 31, 2018, paying spouses can deduct alimony payments from taxable income and recipients must report and pay taxes on that income. If you finalized your divorce after that date, the tax burden is switched. Payors do not get the tax break, and recipients do not have to report the income.
For more information about tax deductions and divorce, contact an experienced Minnesota divorce lawyer at Appelhof, Pfeifer & Hart, P.A.
"Tori had a thorough understanding of my situation and made excellent recommendations to resolve my concerns. She was persistent on communication and handled everything in a very timely manner. I would definitely hire her again in the future if needed." - M.K.
"With Appelhof, Pfeifer & Hart, P.A., it is like having a family physician. They are all knowledgeable, thorough, comforting, and the only call I need to make for all my legal needs for many years to come. No matter what the matter, I totally trust their advice and commitment to me and my family." - J.N.
"Mary from APH Law helped me thru a difficult divorce. She and the entire staff was there for me every step of the way helping me on what to do next. They listened to what I wanted and helped me achieve what matter the most to me in the divorce settlement." - Dana C.
"I chose APH after my initial consultation with Mary. I felt my best interest would be represented. The entire process went excellent, the attorneys and staff communicated effectively and efficiently with me throughout the process as they needed to. Being new to the legal process and verbiage, they walked me and talked me through the next steps and the jargon, I felt completely comfortable and represented. I hope I never have to use legal services again but if I do I will call Mary at APH Law and know that I will be taken care of." - Jeff M.
"Divorce is a time of emotion and stress. Mary Pfeifer , My lawyer was professional and compassionate. She was very informative through the process. Her insight helped me in my decisions. She worked hard to obtain a settlement which was fair to both parties. Though, I hope I won't need her help again. It is reassuring to know a good person that is willing to help." - Rod S.
"I first came to Ms. Jacquelyn Lutz of Appelhof, Pfeifer and Hart in October of 2016. It was definitely the worst time in my life and she compassionately spoke with me about my options. Ms. Lutz thoroughly explained the laws, statutes, process and what to expect going forward. What was supposed to be one case, turned into three intricate cases that took a huge toll on me and my family. Ms. Lutz represented me in court on all three cases with a vast knowledge of the laws and how to proceed accordingly. During all three cases she kept me informed, calm, gave me resources to utilize, and (most important) gave me a realistic view of what may come next. Ms. Lutz knew each case required a great deal of knowledge and creative thinking on how to legally proceed forward with each case. My family and friends are forever grateful for the amazing representation by Ms. Lutz. I highly recommend Ms. Lutz for anyone needing or considering superb representation for any kind of family law. " - M.H.