Don’t Leave Anything on the Table: Understanding Which Legal Fees Are Tax Deductible

Tax season can be a stressful time for many Canadians, especially for those navigating the emotional and financial complexities of family law matters. Whether you’re going through a separation, divorce, or custody dispute, legal fees can add up quickly — but many individuals are surprised to learn that some of these costs may actually be tax deductible.

At The Calgary Legal Team, we’re here to support you through your family law journey and help ensure you aren’t missing out on valuable deductions that could ease your financial burden.

So, Are Family Law Legal Fees Tax Deductible?

The short answer is sometimes. Legal fees in family law matters are not automatically tax-deductible. However, under the Income Tax Act (Canada) and the Canada Revenue Agency (CRA)’s administrative policies, certain legal fees may qualify for a deduction when they relate to establishing, enforcing, or increasing your entitlement to child or spousal support.

Deductible Legal Fees

You may be eligible to claim legal fees on your tax return if:

• You are incurring legal fees to establish a right to child or spousal support under a separation agreement or court order;

• You are pursuing a modification to increase the amount of support you receive;

• You are taking legal action to collect late or unpaid support payments that you are legally entitled to.

It is important to note that only the party receiving support payments may claim these deductions. If you are the one paying support, the legal costs you incur for negotiating or disputing those payments are generally not deductible under current tax law.

Non-Deductible Legal Fees

On the other hand, legal fees associated with the following are typically not deductible:

• Divorce proceedings or property division;

• Custody or access disputes unrelated to support;

• Legal consultations not connected to establishing or enforcing support;

• Modifying a support agreement to decrease the amount of support paid.

These types of legal fees are considered personal or capital in nature and do not qualify as expenses related to the production of income.

Documentation Is Key

Your accountant will typically request a detailed letter from your family lawyer to claim eligible legal fees on your tax return. This letter should outline:

• The nature of your family law matter;

• A breakdown of the legal work done;

• The portion of the fees that relate specifically to support entitlements.

This documentation is essential in supporting your claim on Line 23200 – Other Deductions on your personal income tax return.

We strongly recommend speaking with your accountant or a qualified tax professional to ensure your specific circumstances meet the CRA’s requirements and that your claim is prepared accurately.

Partnering with the Right Professionals

Legal fees are often an unavoidable part of resolving family law disputes, but that doesn’t mean you have to bear the full cost without exploring potential relief. If your legal matter involves pursuing or enforcing child or spousal support, you may be entitled to a deduction that helps reduce your taxable income.

If you have questions about whether your legal fees qualify — or need a letter prepared for your accountant — reach out to us. We’re here to guide you through every step of your family law journey with knowledge, compassion, and practical solutions.

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