Retirement tax questions

SteveInSD · ‎March 6, 2020

In the "On Demand Tax Guidance" it says:

What is the legal fees deduction?

Legal fees aren't deductible on your federal return, but some states allow you to deduct them on your state return. We'll figure out if these expenses can affect your state return and do the calculations for you.

If you have legal fees that relate to your employment or business, those fees are deductible. You can also deduct legal expenses for things that produce taxable income, such as rental property and other investments, and legal fees in connection with an income tax dispute.

How do I qualify?

Eligible expenses include:

Fees for tax advice related to a divorce, if the bill specifies how much of the fee is for tax advice
Costs of collecting taxable alimony or arranging details of alimony payments
Court costs and attorney fees related to either doing or keeping your job, including back pay, injury to reputation, and unlawful discrimination claims
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

What can’t I deduct?

Inherited property

Collecting Social Security

You can deduct the percentage of legal fees related to your Social Security benefits that are taxable.

Example: Susan hired an attorney to help her claim Social Security benefits, 50% of which are taxable. As a result, Susan can claim 50% of the legal fees she paid the attorney.

BUT

In the Tax Interview it says

While your legal fees didn't affect your federal return, you now have a record of your info for future reference, which is smart.

So which is it ???