I started a lawsuit in 2017 for unpaid wages and defamation. Part of the reason I pursued it is because wage claims were a tax deduction. I racked up huge legal bills in 2017, but my settlement didn't come until 2018. Because of that, I didn't pay the bill until 2018. Given the new law that seems to disallow writing off wage claims, I'm wondering if - since the legal work I was charged for was incurred in 2017 - I can still write it off even though I didn't pay the bill until 2018? Not sure if this would involve revising my 2017 return or if I can just make a notation on my 2018 return.
I imagine there must be a way to take the deduction, as there are likely people with millions in legal fees accumulated over many years before the latest tax act was enacted. All of those people would be stuck with a huge legal bill when the law at the time allowed wage claim deductions.
Can anyone help?
