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Can an attorney's fee be deducted?

j-lacorazza — Mon, 03 Jun 2019 19:22:56 GMT

Hi- I am wondering if an attorney's fees can be deducted as a result of a, "forced" new employment contract my employer had provided to the whole department? I was on year two of a three year contract before being given this new contract. Would this fall under the definition of an attorney fee associated with keeping your current job? Thank you.

Yes, legal fees may be deductible on Form 1040, Schedule...

HelenaC — Mon, 03 Jun 2019 19:22:57 GMT

Yes, legal fees may be deductible on Form 1040, Schedule A, Line 28.

Personal legal bills also fall into the “other miscellaneous deductions” category. You can deduct your legal fees as long as the lawyer is pursuing taxable income on your behalf, or is working on a determination, collection, or refund of any tax. For example, if you’re going through a divorce and pay $1,000 to a lawyer who is working to secure alimony for you, you may deduct the $1,000. However, hiring a lawyer to gain custody of a child is not deductible.

You may also deduct legal expenses incurred while doing or working to keep your job. For instance, if you’re in a legal dispute with your company over unlawful termination, you could deduct the expenses as long as you’ve paid the fees you’re deducting and you’re deducting them in the year you paid them.

Legal deductions are limited to 2% of your Adjusted Gross Income (AGI). For instance, if your adjusted gross income is $40,000, your deduction would be limited to $800 – two percent of $40,000.

To deduct certain legal fees related to taxable income:

Type legal expenses, deduction in the search or find box, click search.
Click on Jump to legal expenses, deduction.
Continue with the onscreen questions.

Related Information:

Thank you for your response. Can the fees be deducted in...

j-lacorazza — Mon, 03 Jun 2019 19:22:58 GMT

Thank you for your response. Can the fees be deducted in my particular scenario? Thank you.

Yes, it is related to the pursuit of taxable income.

HelenaC — Mon, 03 Jun 2019 19:22:59 GMT

Yes, it is related to the pursuit of taxable income.

Thank you!

j-lacorazza — Mon, 03 Jun 2019 19:23:00 GMT

Thank you!

Thank you for using TurboTax.

HelenaC — Mon, 03 Jun 2019 19:23:02 GMT

Thank you for using TurboTax.

For year 2018, qualified legal fees, how do you access Sc...

wengell — Mon, 03 Jun 2019 19:23:04 GMT

For year 2018, qualified legal fees, how do you access Schedule A, Line 16?

wait for more definitive answers or possible exceptions b...

Bees — Mon, 03 Jun 2019 19:23:05 GMT

wait for more definitive answers or possible exceptions but I think a lot of previously deductible expenses of an employee are no longer deductible
per jklasser.com : To the extent you can claim a current tax deduction, the pain of the cost of attorney's fees can be eased somewhat. ... Attorney's fees that have been deductible (for 2017 and earlier years) as a miscellaneous itemized deduction subject to the2%-of-AGI floor will no longer be deductible at all starting in 2018.Jan 15, 2018

Thank you. These are attorney fees as they related to a l...

wengell — Mon, 03 Jun 2019 19:23:07 GMT

Thank you. These are attorney fees as they related to a lawsuit involving personal physical injury. I thought it is deductible per IRS 2018 Itemized Deductions, Schedule A, Line 16, Misc Deductions.

However, you may be right, and the law under Trump is (surprise) not clear. What's insane is a $100,000 settlement which requires $40,000 is attorney expenses (gross negligence), the plaintiff is required to report $100,000 in 1099-MISC income, though only received net $60,000.

Search for "forbes Trump Tax Law Hurts Personal Injury Su...

wengell — Mon, 03 Jun 2019 19:23:08 GMT

Search for "forbes Trump Tax Law Hurts Personal Injury Suit Settlements"

Search for "forbes Trump Tax Law Hurts Personal Injury Su...

wengell — Mon, 03 Jun 2019 19:23:09 GMT

Search for "forbes Trump Tax Law Hurts Personal Injury Suit Settlements"

@wengell - Please ask your own new question with the deta...

macuser_22 — Mon, 03 Jun 2019 19:23:10 GMT

@wengell - Please ask your own new question with the details. You are tagging onto a 3 year old question that has been answered and the tax laws have changed. Almost no body that can give you a current answer will see this "add on" comment to an old question.

Some attorneys fees for collecting income are still "above the line" deductible but most personal injury fees are not.

But is you want a more definitive answer then please ask a new question so more user will see it.

Re: Can an attorney's fee be deducted?

Iammak — Mon, 02 Mar 2020 19:17:00 GMT

Has this changed? I found the link but when I click on 'Jump to legal expenses, deduction', nothing happens.

Re: Can an attorney's fee be deducted?

macuser_22 — Mon, 02 Mar 2020 19:42:26 GMT

@Iammak wrote:

Has this changed? I found the link but when I click on 'Jump to legal expenses, deduction', nothing happens.

Yes - see my post right above yours. There have been MANY tax law changes since this thread started several years ago.

Please post a NEW question with *your* details.