TomD8
Level 15

Deductions & credits

This TT help reference may be useful to you:

https://turbotax.intuit.com/tax-tips/tax-deductions-and-credits/can-i-deduct-legal-fees-on-my-taxes/...

 

Note that "business-related" means a business that reports on Schedule C, E, or F.  (Exception: whistleblower and discrimination claims)

 

Also: you cannot deduct expenses incurred in 2020 on a 2021 return.

 

Non-business legal fees used to generally be deductible on Schedule A as a miscellaneous itemized deduction, but this was nixed by the 2017 tax reform law.   Thus, successful litigants are now generally taxed on the gross settlement amount without reduction for attorney fees.  

**Answers are correct to the best of my ability but do not constitute tax or legal advice.