Solved: Can I deduct my attorney fees paid for a lawsuit filed against my former employer for ADA violation, invasion of privacy, retaliation and unlawful termination?
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Level 2

Can I deduct my attorney fees paid for a lawsuit filed against my former employer for ADA violation, invasion of privacy, retaliation and unlawful termination?

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Level 7

Can I deduct my attorney fees paid for a lawsuit filed against my former employer for ADA violation, invasion of privacy, retaliation and unlawful termination?

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

Since wrongful termination is related to securing taxable income, your legal  fees are deductible.

    To deduct legal fees, you must itemize deductions on Schedule A, and the sum total of your miscellaneous deductions including your legal fees must exceed 2% of your Adjusted Gross Income.

    To enter legal fees:

    • Type in legal expenses, deduction in the search box, top right of your screen, then click the magnifying glass

    • Click the jump to legal expenses, deduction link in the search results.

    View solution in original post

    2 Replies
    Level 7

    Can I deduct my attorney fees paid for a lawsuit filed against my former employer for ADA violation, invasion of privacy, retaliation and unlawful termination?

    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

    Since wrongful termination is related to securing taxable income, your legal  fees are deductible.

      To deduct legal fees, you must itemize deductions on Schedule A, and the sum total of your miscellaneous deductions including your legal fees must exceed 2% of your Adjusted Gross Income.

      To enter legal fees:

      • Type in legal expenses, deduction in the search box, top right of your screen, then click the magnifying glass

      • Click the jump to legal expenses, deduction link in the search results.

      View solution in original post

      New Member

      Can I deduct my attorney fees paid for a lawsuit filed against my former employer for ADA violation, invasion of privacy, retaliation and unlawful termination?

      This answer is generally incorrect.  Legal fees and costs associated with wrongful termination are "deductible above the line" in almost all cases.  See the discussion from the ABA:

       

      https://www.americanbar.org/groups/business_law/publications/blt/2019/11/gross-recoveries/

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