Yes, legal fees may be deductible on Form 1040,
Schedule A, Line 28.
Personal legal bills also fall into the “other miscellaneous deductions”
category. You can deduct your legal fees as long as the lawyer is pursuing taxable
income on your behalf, or is working on a determination, collection, or refund
of any tax. For example, if you’re going through a divorce and pay $1,000 to a lawyer who is working to secure alimony for
you, you may deduct the $1,000. However, hiring a lawyer to gain custody of a
child is not deductible.
You may also deduct legal expenses incurred while doing or working
to keep your job. For instance, if you’re in a legal dispute with your company
over unlawful termination, you could deduct the expenses as long as you’ve paid
the fees you’re deducting and you’re deducting them in the year you paid them.
Legal deductions are limited to 2% of your Adjusted
Gross Income (AGI). For instance, if your adjusted gross income is $40,000,
your deduction would be limited to $800 – two percent of $40,000.
To deduct certain
legal fees related to taxable income:
- Type legal expenses, deduction in the search or find box, click search.
- Click on Jump to legal expenses,
deduction.
- Continue with the onscreen questions.
Related
Information:
