I had to sue my 401k company, can i deduct attorney fees

The company, Life Partners Inc., that held my 401K got in trouble with the SEC and was filing bankruptcy. I had to sue to keep my 401K, can I write off the attorney fees? 

bwa
Alumni
Alumni

Retirement tax questions

Legal fees are generally not deductible. There are two significant exceptions

  • legal fees are deductible if incurred to determine or collect any tax liability.
  • legal fees are deductible if the suit is to secure taxable income. These would include court costs and attorney fees related to either doing or keeping your job, including back pay and unlawful discrimination claims

The legal fees you paid would seem to meet those criteria.

To enter deductible legal fees go to:

  • Federal Taxes, then
  • Deductions and Credits, then
  • I'll choose what I'll work on, then
  • Other Deductions and credits, then
  • Legal Fees


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