Those self-employed would deduct it on Schedule C. From the article,
In general, legal fees that are related to your business, including rental properties, can be deductions. This is true even if you didn't win the legal case in which the legal fees were incurred. For instance, according to the IRS, you can deduct:
- Fees that are ordinary and necessary expenses directly related to operating your business (should be entered on Form 1040, Schedule C).
- Fees for resolving tax issues, advice or preparation of tax forms related to your business (should be included on Form 1040, Schedule C).
- Fees for rentals or royalties on properties for which you earn income (should be included on Form 1040, Schedule E)
- Fees related to farm income and expenses (should be included on Form 1040, Schedule F).
Additionally, the following legal fees, although not associated with your workplace, are also deductible:
- Fees related to adopting a child if you qualify for the federal adoption tax credit (should be included on Form 8839).
- Fees related to whistleblower claims (should be included on Form 1040).
- Fees related to unlawful discrimination claims (should be included on Form 1040).
Any legal fees that are related to personal issues can't be included in your itemized deductions.
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