Tax help for attorneys and solo law firms
You bill your time to the minute and still end up guessing at tax time. We handle the return, the trust account questions, and the case costs you carry for clients.
Nothing is due today. Personal returns start at $250.
Your income does not arrive on a schedule. A contingency fee lands in March and nothing follows it for five months, you advance costs on matters that may not resolve for two years, and part of what sits in your bank belongs to a client rather than to you. Law is also treated as a service field under the qualified business income rules, so a return that looks simple on paper can carry more than it appears to.
What lawyers can usually deduct
Ordinary and necessary costs of your work. Rules and dollar limits change year to year, so we confirm every one of these against the current year when we prepare your return.
Bar license and admission fees
Your annual state bar license fee, client security fund assessment, pro hac vice fees when you appear in another state, and the cost of keeping a second or third state license active.
The fee to sit for the bar exam and be admitted the first time is not deductible, because it qualified you to enter the profession. Renewals after that are ordinary business costs.
Malpractice and cyber coverage
Your professional liability premium, the tail coverage you buy when you leave a firm or close a practice area, cyber liability for the client data you hold, and the property or general liability policy on the office itself.
Your own health insurance is not part of this. Premiums you pay for yourself are handled in a different place on the return, so keep those numbers separate.
Legal research subscriptions
Westlaw, Lexis, Bloomberg Law, Fastcase, PACER charges, docket alert services, practice guides, form books, and the treatises you keep current in your area.
If a firm or a client reimburses you for research on a matter, you deduct only what you actually paid and never got back.
Practice management software
Clio, MyCase, Smokeball, PracticePanther and the rest: time and billing, conflict checking, document assembly, e-signature, the encrypted client portal, and secure cloud storage for files.
Equipment and software you buy outright and use for years may have to be written off over time instead of all at once, so keep the invoice, not just the bank line.
Case costs you advance
Filing and e-filing fees, court reporters, deposition transcripts, expert witnesses, investigators, medical record retrieval, service of process, interpreters, and mediator fees you pay to move a matter forward.
On a contingency case, costs you advance and expect to recover out of the recovery are generally treated as advances to the client rather than your own expense on the day you write the check. They reach the return when it becomes clear the money cannot be recovered. How your fee agreement is written affects this, so bring it.
Referral fees and co-counsel splits
What you pay another lawyer for a referral, or for carrying part of a matter, is a business expense whether the split is measured in hours or in a share of the fee.
The usual exemption for payments made to corporations does not apply to payments made to attorneys, so a referral fee to an incorporated firm still has to be reported. Get a Form W-9 before the check goes out.
Paralegals and contract attorneys
Contract attorneys for overflow, freelance paralegals, document review help, court runners, transcriptionists, and the virtual receptionist who answers while you are in a hearing.
Someone who works your hours, at your direction, on your systems may be an employee rather than a contractor. The difference is payroll tax, not paperwork.
Office space, or a room at home
Rent on a suite, a coworking desk, a virtual office address, and the conference rooms you book by the hour for depositions and signings. Working from home, a share of rent or mortgage interest, property tax, insurance and utilities may qualify.
A home office has to be used only for the practice, used regularly, and be either your principal place of business or a place you meet clients. A desk in the family room, or a room where client files sit next to the treadmill, does not pass the exclusive use test. If you also keep an outside office, tell us, because it changes the analysis.
Driving for the practice
Trips to the courthouse, depositions, mediations, client meetings, jail and prison visits, the clerk's office and the records room. Log the date, the miles and the matter, then we compare the standard mileage rate published for that year against your actual vehicle costs and use what the rules allow for your vehicle.
Driving from home to an office you keep is commuting and is not deductible. Courthouse parking and tolls are deductible on top of the mileage rate, but a parking ticket or a moving violation never is.
CLE and professional memberships
Course fees, the annual CLE bundle, review courses that keep you current in an area you already practice, plus state, county and specialty bar sections, inns of court, and trial lawyer or defense associations.
Bar review courses and a degree that opens a new field are not deductible, because they qualify you for something new rather than keep you sharp at what you already do. Certification and exam fees sit closer to the line, so bring them and we will look at them one by one. The share of association dues spent on lobbying is not deductible either, and social or country club dues stay off the return even when the golf brings in cases.
Marketing and client intake
Your website and hosting, search advertising, Justia, Avvo and Martindale profiles, lead services, the after hours answering service, and printed material for the office.
A sponsorship counts as advertising when your name and practice are actually put in front of people. A gift to a charity with no advertising attached is a personal charitable contribution, not a business expense, so keep the two apart.
Travel and client meals
Airfare, hotel, rental car and meals when a trial, arbitration, deposition or closing takes you away from home overnight. A meal with a client or a referral source counts as well, as long as you are there, the meal is not lavish, and you actually discuss the work.
Business meals are only partly deductible, and the share allowed is set by law and has changed over the years, so we apply the rule that fits the year you are filing. Tickets to the game you took a referral source to are entertainment and are not deductible at all, even if a case came out of it. If you add personal days to a work trip, only the business part of the travel counts.
A solo practice reports on Schedule C by default, and an S corporation is worth pricing only once the profit is steady and large enough that the self-employment tax it saves clearly beats the cost of payroll, a second return, and the upkeep that comes with it.
What to bring us
You do not need all of it to start. Send what you have and your checklist shows what is still open.
- Your profit and loss for the year, or the year-end financial report out of Clio, MyCase or whatever you bill from
- Every Form 1099-NEC and Form 1099-MISC you received, from firms, insurers and clients, plus a list of fees clients paid you that nobody reported
- The year-end trust account reconciliation and a report of every transfer you made from trust to your operating account during the year
- Full-year statements for the operating account and any business credit card
- A cost ledger by matter showing what you advanced, what was reimbursed, and what you finally could not recover
- Referral fees and co-counsel splits you paid, with a Form W-9 on file for each attorney or firm
- Your mileage log or app export, showing dates, miles and the reason for each trip
- Invoices for bar license fees, CLE, malpractice premiums and research subscriptions
- Home office numbers: the square footage of the room, the size of the home, and the year's rent or mortgage interest, property tax, insurance and utilities
- Last year's return, your estimated tax payments, retirement contributions, and the health insurance premiums you paid yourself
What trips people up
Deducting the suits
Courtroom clothing is suitable for everyday wear, so it does not qualify, no matter what it cost or that you only put it on for court. Put the effort into the deductions that hold up under review.
Writing off advanced case costs in the year you paid them
Track advances as money owed to you, matter by matter, and take the deduction when the case ends and the cost cannot be recovered. A clean cost ledger in your practice management software is most of the fix.
Running the practice through the trust account
Pay case costs and refunds from the right account, and move earned fees to operating on a set schedule. Clean trust records keep you on the right side of your state's trust rules and make the return provable if anyone asks.
Getting caught short after a large contingency fee
Set the tax aside when the check clears and pay the estimate for that quarter instead of waiting until the return is due. Lumpy income is the normal shape of this practice, and the estimates have to follow it.
Paying a referral fee without collecting a W-9
Get the Form W-9 before the check leaves, then issue the information return when the year's filings go out. Chasing another firm for a taxpayer ID a year after the case closed takes far more of your time than asking up front.
What it costs
Our published list, the same one everyone sees. Prices marked "from" are starting points, and your exact number is confirmed in writing before any work begins.
$0 is due today. You pay when you sign, or you can have your fee come out of your refund, so it can be $0 out of pocket.
Questions we get from your trade
The carrier sent a Form 1099-MISC for the whole settlement. Do I report all of it?+
No. You report the fee you earned, not the client's share. A payer often reports the gross amount that passed through your hands, so the return has to explain the gap between that figure and your income. Your settlement statement and trust records are what explain it, so bring both.
Is a retainer income the day the client pays it?+
Money that is still the client's while it sits in trust is not yours yet. It becomes income when you earn it and move it to the operating account. A fee that is yours the moment it is paid, with nothing held back for the client, is income when you receive it. Your fee agreement and your state's trust rules decide which one you have, so bring the engagement letter.
Everyone tells me to become an S corporation. Should I?+
It can reduce self-employment tax on the profit above a reasonable salary, but it adds payroll, a separate business return, and real annual cost, and some states add their own filing fee or entity level tax. It is a math question, not a rule. We price it against your actual profit first, and we will tell you plainly when the answer is no.
Does the qualified business income deduction apply to a law practice?+
Law is one of the service fields with its own limit. Below the income threshold set for that year you can qualify, and above it the deduction for a law practice phases out and then disappears. That is why your taxable income for the year drives the answer, and why the year-end profit number is worth planning around.
Can I deduct law school, or the interest on the loans?+
Not the tuition. Education that qualified you to practice is not a business deduction, no matter how recently you paid for it. Student loan interest is a separate personal deduction with its own income limits, and we check it on the return.
I do contract work for two firms and carry my own clients. How does that get reported?+
The Form 1099-NEC from each firm and the fees your own clients pay you go on the same Schedule C, and self-employment tax is figured on Schedule SE. If one firm puts you on a W-2 instead, that piece is wages and is handled separately, which changes what you can deduct against it.
Let us take the tax part off your plate.
Tell us what you need and see your price. A real person on your team replies within one business day.