@James Walle wrote:
Don't thinks this advice is accurate. See Pub. 529 (rev. Dec. 2020), pp 10 & 11 which separately state on each page that attorney fees for wrongful termination ARE deductible by being listed on Schedule 1. This top of the line deduction does not need to be put on Schedule A so you may still take the Standard Deduction. Am I reading this correctly? Will the Turbo Tax 2020 program use the Schedule 1 Deduction????
I see nothing in Pub 529 that uses the words "wrongful termination " at all. It talks about unlawful discrimination that was discussed earlier in this thread. That can be reported in Schedule 1, but the TurboTax interview does not support that.
If this is an employment discrimination then legal fees are a "above the line" deduction that TurboTax does not support in the interview.
This deduction cannot be claimed using the online version.
It can only be entered in the forms mode in the CD/download desktop version directly on the 1040/ 1040SR Worksheet for Schedule 1 line 22.
in the smart worksheet line H enter the code UDC and the amount.
That will put it on the 1040 form line 10 as a deduction to income.
Per the IRS 1040 instructions page 97.
[quote]
Line 22
Include in the total on line 22 any of the following write-in adjustments. To find out if you can take the deduction, see the form or publication indicated. On the dotted line next to line 22, enter the amount of your deduction and identify it as indicated.
•Attorney fees and court costs for actions involving certain unlawful discrimination claims, but only to the ex-tent of gross income from such actions (see Pub. 525). Identify as “UDC.”
[end quote]
\https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
