Did you know that as an Individual in Canada you are able to deduct certain legal expenses?

 

Legal fees paid to collect, establish or increase the amount of support payments 

The tax treatment of legal fees paid during a separation and divorce are generally complicated.  Most of the legal fees incurred are not deductible since they are considered a personal or living expense.  On the other hand, legal fees incurred with respect to support payments may possibly be deductible.  Whether or not they are deductible by you as an individual will depend on whether you are the payer or the recipient of the support payments.

Legal expenses to obtain or collect wages

You can deduct legal fees that you paid in the year to collect, or to establish a right to collect, wages or a salary from an employer or a former employer.  However, you must reduce your claim by any amount awarded to you for those fees, or any reimbursement you received for your legal fees (obviously the CRA will not allow you to double dip).

Legal and Accounting fees for representation with the Canada Revenue Agency

That is the fees paid for advice or assistance in a CRA review, or to object or appeal an assessment.  These fees paid are fully deductible in the year they are incurred. This means that if you are ever served with a demand letter, or there is a review or reassessment of your tax return, the fees paid to assist you are fully deductible on your next tax return.

Accounting fees paid in order to earn investment income 

It is allowable to deduct carrying charges associated with your investments, such as interest on money borrowed to earn interest, dividend and other royalty income.  You can also fully deduct legal and accounting fees that are paid in connection with issuing bonds, debentures or mortgages.