Starting Your Business/Keeping Tax Records
What are Business Expenses
Legal Fees
Legal and professional fees, such as fees charged by accountants,
that are ordinary and necessary expenses directly related to operating
your business are deductible as business expenses. However, you
usually cannot deduct legal fees you pay to acquire business assets.
Add them to the basis of the property. See Publication
551, Basis of Assets.
If the fees include payments for work of a personal nature (such as
making a will), you take a business deduction only for the part of the fee related to your
business. The personal portion of legal fees for producing or collecting taxable income,
doing or keeping your job, or for tax advice may be deductible on Schedule A (Form 1040)
if you itemize deductions.
Important References
Publication
535
Business Expenses
Publication
551
Basis of Assets
Form
1040 Schedule C Profit or Loss from Business