You may deduct the attorney's fees included as part of your Social Security Disability Income. The Social Security SSA-1099 may display the attorney's fees but not deduct the amount from the net benefit in box 5.
Enter the adjustment in TurboTax Online as follows:
- Down the left side of the screen, click Federal.
- Down the left side of the screen, click Wages & Income.
- Click Show more to the right of Less Common Income.
- To the right of Miscellaneous Income, 1099-A, 1099-C, click the Start / Revisit button.
- To the right of Other reportable income, click the Start / Revisit button.
- At the screen Other Taxable Income, enter a description “Attorney's fees” and the attorney's fees as a negative amount.
The entry will be reported:
- on line 8z of Schedule 1 of the Federal 1040 tax return, and
- on line 8 of the Federal 1040 tax return.
See also here.
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