I'm imputing legal fees under other deductions and credits for settlements my wife and I won against our former employer. It isn't calculating against our deductions.

Forum|Forum|7 years ago
June 3, 2019
2 replies
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TurboTax Premier Online

Opus 17

Level 15

Most legal fees are no longer a federal deduction, it was eliminated in the tax reform act. The program allows you to enter them because some states might allow the deduction.

Legal fees specifically for a claim of unlawful discrimination, or whistleblower lawsuits against the federal government, are still deductible but the procedure is not officially supported by Turbotax. You can claim the deduction by making a manual entry on one forms using Forms mode, which is only available in the desktop program installed on your own computer -- online does not have Forms mode. Or see a professional this year.

MinhT1

Level 15

Up to tax year 2017, legal fees incurred for the protection of your income were deductible as a miscellaneous itemized deduction subject to the 2% of AGI floor.

Under the Tax Cuts and Jobs Act, the miscellaneous itemized deductions subject to the 2% of AGI floor are suspended for expenses incurred after December 31, 2017 through 2025.

Therefore, your legal fees are no longer deductible for tax year 2018.

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