Qualified legal fees are deducted on sch 1. You will report it as negative income rather than a deduction. There are no taxes on this income.
To enter your qualifying legal fees from an employment discrimination suit in TurboTax Online,
- Go to Wages & Income
- Scroll down to Less Common Income,
- Next to Miscellaneous Income,
- Select Other reportable income
- Description "Qualifying Legal Fees," and
- Enter the amount as a negative number.
The deduction will appear as an “above the line” deduction and will be deducted from your gross income.
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