Is job contract review lawyer's fees tax deductible

 
MargaretL
Expert Alumni

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Yes, it is.  Legal fees relating to either doing or keeping your job are tax deductible. They are part of your itemized deductions:

  1. Federal Taxes
  2. Deductions and Credits
  3. Scroll down to Other Deductions and Credits
  4. Select Legal Fees

 

Legal Fees you can deduct:

  • Court costs and attorney fees related to either doing or keeping your job, including back pay, injury to reputation, and unlawful discrimination claims
  • Costs of collecting taxable alimony or arranging details of alimony payments
  • Fees for tax advice related to a divorce, if the bill specifies how much is for tax advice. You cannot deduct any other legal fees related to a divorce or child support since they are personal expenses not related to taxable income.
  • Fees for personal injury actions where you recover taxable damages
  • Estate tax planning fees related to tax planning or income-producing property
  • Costs of collecting taxable Social Security benefits
  •  Fees to recover income-producing property such as stocks or bonds loaned as collateral

 

Legal fees you cannot deduct:

  • Expenses for personal lawsuits unless you recover taxable damages
  • Legal fees for personal injury awards that are tax-free
  • Legal costs related to the acquisition or determination of title to property. However, you may add these costs to the basis of the property, which becomes important when you sell the property, or if you depreciate it.
  • The costs of contesting a will. This is because an inheritance is not taxable income.
  • Legal fees for divorce or child support actions, other than those stated above as eligible.
Sdsernaker
Returning Member

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My husband is being sued over an employment contract.  Legal fees are over $60,000 this year.  I am not seeing a way to put them into turbotax.  If I do it the workaround way that was suggested, it doesn't seem to make the kind of difference that I expect to see (Maybe alternative minimum is kicking in, or the suggested place to put it doesn't work?)  Any suggestions?  

Sdsernaker
Returning Member

Get your taxes done using TurboTax

My husband is being sued over an employment contract.  Legal fees are over $60,000 this year.  I am not seeing a way to put them into turbotax.  If I do it the workaround way that was suggested, it doesn't seem to make the kind of difference that I expect to see (Maybe alternative minimum is kicking in, or the suggested place to put it doesn't work?)  Any suggestions?  

Get your taxes done using TurboTax

You are posting on a thread that is several years old. The tax law has changed since then.