Fees Paid for Debt Settlement are Tax Deductible

by | Jan 27, 2014 | Credit Card Debt, Tax Implications

Tax season is here.  As we are all looking for ways for get the biggest refund possible here’s one deduction that may help.  Fees paid for debt settlement services are tax deductible starting this year, 2013.  The decision came from a 2012 United States Tax Court Case.

https://www.ustaxcourt.gov/InOpHistoric/TranSummarySwift.SUM.WPD.pdf

In the case, the petitioner wanted to write off fees paid to a debt settlement company whose services resulted in the successful reduction of credit card debt.  The court found that because the debt settlement company’s efforts directly resulted in a $6,753 reduction of debt, their fees of $2,343 qualified as a miscellaneous itemized deduction.

If you are in debt contact a qualified debt settlement attorney.  A qualified debt settlement attorney can successfully negotiate large reductions in the balance of a debt.  In addition, their fees are now tax deductible further helping consumers get out of debt faster.  It’s a win-win situation.

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Kevin Fallon McCarthy

Kevin Fallon McCarthy is the McCarthy Law PLC’s managing attorney and an experienced Phoenix debt attorney. Mr. McCarthy has also worked as general counsel for a large corporation. He has corporate counsel experience in human resource matters, general corporate governance, and union class action litigation.