Tax Deductions for Lawyers

Solo Practitioner vs. Law Firm Partner

Tax treatment varies based on your practice structure:

Solo Practitioner (Schedule C)

As a solo attorney, you report income and expenses on Schedule C. You can deduct all ordinary and necessary business expenses directly.

Law Firm Partner (K-1)

Partnership income flows through on Schedule K-1. Your share of firm expenses is already accounted for, but you may have additional unreimbursed partner expenses to deduct on Schedule E.

Associate Attorney (W-2)

W-2 employees generally cannot deduct unreimbursed business expenses on federal returns under current law (2018-2025). However, some states still allow these deductions.

Legal Research Subscription Costs

Legal research databases are essential but expensive. Common deductible subscriptions:

• Westlaw Edge: Comprehensive legal research
• LexisNexis: Research and practice management
• Fastcase: State bar-included or subscription
• Casetext/CoCounsel: AI-enhanced legal research
• Bloomberg Law: Legal research and analytics

Keep annual statements showing subscription costs.

Continuing Legal Education

All states require CLE credits to maintain your license. Deductible CLE expenses include:

• Course registration fees: In-person and online CLE courses
• Conference attendance: Legal conferences with CLE components
• Travel expenses: Transportation, lodging, and meals (50%) for out-of-town CLE
• Materials: Books and publications from CLE programs

Note: Some CLE is free, but paid premium courses for specialty areas are deductible.

Home Office for Attorneys

Many attorneys work from home offices. Requirements:

• Exclusive use: Dedicated space for legal work
• Regular use: Consistent use for client work, research, drafting
• Meeting with clients: If clients visit, ensure proper professional setting

Deductible home office expenses:

• Proportional rent or mortgage interest
• Utilities and internet
• Home office furniture (desk, chair, bookshelf)
• Office supplies and equipment

Client Development and Marketing

Building your practice involves deductible expenses:

• Business meals: 50% deductible when discussing legal matters with clients or referral sources
• Bar association events: Networking events and sponsorships
• Website and SEO: Law firm website development and legal marketing
• Advertising: Online ads, directory listings (Avvo, Justia, FindLaw)
• Seminars and speaking: Costs to present at legal or business seminars

Document the business purpose of all client development activities.

Trust Account Considerations

IOLTA and trust account management:

• Trust account fees: Bank fees for maintaining trust accounts are deductible
• Interest earned: IOLTA interest goes to state bar foundation (not your income)
• Client funds: Never deduct expenses paid from client trust funds as your expenses

Maintain clear separation between operating and trust accounts.

Professional Liability Insurance

Malpractice insurance is typically required and fully deductible. Costs vary significantly by:

• Practice area (litigation higher than transactional)
• Claims history
• Coverage limits
• Deductible amounts

Shop around periodically to ensure competitive rates.