Under current law, the only legal fees that are deductible for individuals on the Federal return are those related to employment discrimination cases where you are the plaintiff, whistleblower reward cases, and legal fees related to a business reported on Schedule C or Schedule E.
Please see this TurboTax tips article for more information regarding attorney fees. Any legal fees that are related to personal issues can't be included in your itemized deductions. According to the IRS, these fees include:
- fees related to nonbusiness tax issues or tax advice
- fees that you pay in connection with the determination, collection or refund of any taxes
- personal legal expenses, including:
- child custody
- purchasing real estate
- breach of promise to marry
- civil or criminal charges related to personal relationships
- personal injury
- title preparation
- estate planning such as will preparation
- property claims or settlements
- divorce
- Fees for defending civil or criminal charges that arise from your participation in a political campaign
Please see IRS Publication 529 for more information on miscellaneous deductions and the changes to the law.
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