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jacksonduper
New Member

My wife had to pay a $1000.00 termination fee to terminate her teaching contract to move employers can we deduct that on out taxes?

 
3 Replies
MargaretL
Employee Tax Expert

My wife had to pay a $1000.00 termination fee to terminate her teaching contract to move employers can we deduct that on out taxes?

Yes, you can deduct the termination fee.

Per IRS publication 529: "If you break an employment contract, you can deduct damages you pay your former employer if the damages are attributable to the pay you received from that employer".

The deduction is subject to 2% AGI limitation and part of your itemized deductions:

  1. Federal Taxes
  2. Deductions & Credits
  3. Employment Expenses
  4. Job-Expenses for W-2 Income

https://ttlc.intuit.com/replies/4800344

f18lumpy
New Member

My wife had to pay a $1000.00 termination fee to terminate her teaching contract to move employers can we deduct that on out taxes?

I had a similar situation occur during the fall of 2019.  Where in TT 2019 do I enter the employment termination expense?

JohnB5677
Employee Tax Expert

My wife had to pay a $1000.00 termination fee to terminate her teaching contract to move employers can we deduct that on out taxes?

MargrettL described it perfectly:

 

The deduction is subject to 2% AGI limitation and part of your itemized deductions:

 

  1. Federal Taxes
  2. Deductions & Credits
  3. Employment Expenses
  4. Job-Expenses for W-2 Income

https://ttlc.intuit.com/replies/4800344

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