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sandrakaykay
New Member

Can you deduct attorney fees paid to get Social Security Disability?

 
5 Replies
Marketstar
Level 7

Can you deduct attorney fees paid to get Social Security Disability?

On a personal return (1040) legal fees are generally not deductible. The two exceptions are for legal fees incurred to determine or collect any tax liability, and legal fees expended to secure taxable income.

Therefore, legal fees can be deducted to the extent Social Security income is taxable. For instance, if 50% of Social Security income is taxable, then 50% of legal fees are deductible.

To deduct legal expenses, you must have enough itemized deductions (ie. Medical, mortgage interest, property taxes, charitable giving, ect) to exceed your Standard Deduction. If you itemize, your deduction is limited to the extent that it exceeds 2% of your Adjusted Gross Income.

So, you may not gain a tax benefit for this deduction.

To report legal fees in TurboTax:

  • Click My Account (Top right of your screen).

  • Select Tools.

  • In the pop up window, select Topic Search.

  • In the search bar, type in legal expenses, deduction

  • Highlight it and select GO, and follow the prompts.

roberteconnors
New Member

Can you deduct attorney fees paid to get Social Security Disability?

I just read IRS pub 529, and the way I read it, legal fees are not deductible in 2019, even if associated with producing income.  I just paid a lawyer 6000 to gain SSA disability benefits and am trying to figure out if I can deduct some of it.  49% of my SSA lump sum disability benefit is taxable...but it appears I can't deduct anything for legal fees.

xmasbaby0
Level 15

Can you deduct attorney fees paid to get Social Security Disability?

@roberteconnors The tax laws that passed for 2018 and beyond eliminated legal fees as a deduction for your federal return.

 

https://ttlc.intuit.com/questions/4482873-which-federal-tax-deductions-have-been-suspended-by-tax-re...

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
MsGretle
Level 1

Can you deduct attorney fees paid to get Social Security Disability?

so...what is the correct answer?

Opus 17
Level 15

Can you deduct attorney fees paid to get Social Security Disability?

It is confusing because this board was opened in May and June 2019, and all the old content was copied from the old board but given a 2019 date.  So answers that were correct in 2015 or 2016 may be incorrect now but have a misleading date. 

 

As of the Tax Cut and Jobs Act of 2018, all miscellaneous itemized deductions are disallowed for the period 2018-2025.  That includes personal legal fees, including legal fees incurred in the production of taxable income. You can still list the fees in Turbotax, and they might reduce your state income tax--if you itemize your deductions on your state return and your state still uses the old rules--but they are not deductible on your federal return. 

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