The odds are good you're going to need legal advice some day. Maybe you're thinking about getting a divorce, need help writing a lease for the house you want to rent, or were injured in an auto accident and want to sue the other driver.

Regardless of why you need an attorney, you're going to have to pay for the lawyer's legal services. We all know that lawyers aren’t cheap. Can you at least offset some of that cost by taking a tax deduction for attorney's fees?

General Rule: Personal Legal Fees are Not Deductible

Personal or investment-related legal fees are not deductible starting in 2018 through 2025, subject to a few exceptions. In the past, these fees could be deductible as a miscellaneous itemized deduction. However, the TCJA eliminated these deductions for 2018 through 2025.

Examples of attorney fees you may not deduct include fees for:

• filing and winning a personal injury lawsuit or wrongful death action (but the money you win isn't taxable)
• estate tax planning or settling a will or probate matter between your family members
• help in closing the purchase of your home or resolving title issues or disputes (these fees are added to your home’s tax basis)
• obtaining custody of a child or child support
• name changes
• legal defense in a civil lawsuit or criminal case—for example, attorney fees you pay to defend a drunk driving charge or against a neighbor's claim that your dog bit and injured her child
• lawsuits related to your work as an employee--for example, you can't deduct attorney fees you personally pay to defend a lawsuit filed against you on a work-related matter, such as an unlawful discrimination claim filed by a former employee that you fired
• tax advice during a divorce case, and
• attempting to get an ex-spouse to pay past-due alimony.

Personal Legal Fees You Can Deduct

Personal attorney fees are deductible in a few types of cases.

Employment Discrimination Cases

You may deduct 100% of the attorney fees you incur as a plaintiff in certain types of employment-related claims. These include cases where you are alleging unlawful discrimination, such as job-related discrimination on account of race, sex, religion, age, or disability. Such attorney fees are deductible "above the line" as an adjustment to income on your Form 1040. This means you don't have to itemize your personal deductions to claim them. The only limit on this deduction is that you can't deduct more than your gross income from the lawsuit.

Certain Property Claims Against the Federal Government

Individuals may also deduct attorney fees if they sue the federal government for damage to their personal property. This applies both to civilians and federal employees. For example, a soldier can sue the government if his or her property is damaged during deployment. Like the attorney fees deduction for discrimination claims, this deduction is an adjustment to income.

Whistleblower Cases

You can also deduct your attorney fees if the IRS grants you a whistleblower award. This involves letting the IRS know about someone who is cheating on their taxes or committing certain other legal violations. If the IRS collects money from them, you'll be awarded a percentage. Like the attorney fees deduction for discrimination claims, this deduction is an adjustment to income and is limited to the amount of your award.

Business-Related Attorney Fees are Deductible

You usually can deduct legal fees you incur in the course of running a business.

General Business Matters

If you own a business and hire an attorney to help you with a business matter, the cost is deductible as a business operating expense, subject to a few important exceptions. For example, you can deduct fees paid for:

• collecting money owed to you by a customer
• defending you or an employee in a lawsuit over a work-related claim, such as a discrimination lawsuit filed by a former employee
• negotiating or drafting contracts for the sale of your goods or services to customers
• defending against trademark, copyright, and patent claims
• providing tax advice for your business.

If you’re a sole proprietor, these fees are deducted on IRS Schedule C. If you're a landlord, they are deducted on Schedule E.

Rental Activities

If you own rental property, you can deduct legal fees you incur in the course of your rental activity provided that your rental activity qualifies as a business, not an income producing activity. But this does not include fees paid to acquire rental property. For example, if your rental activity is a business, you can deduct attorney fees incurred to evict a tenant. These fees are deducted on Schedule E.

Most rental activities qualify as a business. However, some may not. For example, the IRS has indicated landlords who have triple net leases with their tenants are not in business. Such leases require tenants to take care of property maintenance and insurance as well as paying rent.

Start-up Expenses

If you hire a lawyer to help you start a business—for example, to form a corporation or limited liability company—the cost is currently deductible up to $5,000. Any amounts over $5,000 may be deducted over the first 60 months you are in business.

Acquiring Property

Legal fees incurred in creating or acquiring property, including real property, are not immediately deductible. Instead, they are added to the tax basis of the property. They may deducted over time through depreciation.

Check with Your Lawyer

If you're concerned about whether you'll be able to deduct attorney's fees, ask your attorney if any of the fees he or she will charge will be tax deductible. You should ask before the attorney does the work. Also, ask your attorney to prepare a billing statement that shows clearly what part of the fees are deductible.