Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
New Member
posted Jun 1, 2019 10:45:24 AM

I have legal fees that ARE deductible, however I cannot make the system recognize their deductibility. Help?

0 9 895
1 Best answer
Level 15
Jun 1, 2019 10:45:36 AM

If you are confident that your legal expenses are deductible and you are an employee so you can't deduct them on a Sch C, this is a work around:

Go to Income>Choose what to work on>Less Common Income>Misc income at bottom of the window>Other Reportable Income at bottom of widow>answer "Yes">Enter a description like "deductible legal expenses" and enter your expense as a negative number.  This will go to Sch 1 of the F. 1090 and deduct that amount from your AGI.

9 Replies
Level 15
Jun 1, 2019 10:45:25 AM

What are the legal fees for? What makes them deductible?

New Member
Jun 1, 2019 10:45:28 AM

They are related to retaining and protecting employment and income in my trade.

New Member
Jun 1, 2019 10:45:30 AM

I have already confirmed their deductibility.  I can't make TT take the deduction.

Level 15
Jun 1, 2019 10:45:31 AM

Are you an employee?

Level 15
Jun 1, 2019 10:45:31 AM

On what form or schedule would the deduction appear?

IRS Publication 17 (page 193) says the following.

"Legal expenses that you incur in attempting to produce or collect taxable income, or that you pay in connection with the determination, collection, or refund of any tax are miscellaneous itemized deductions and are no longer deductible."

What makes your legal fees an exception to this rule?

New Member
Jun 1, 2019 10:45:32 AM

I have already confirmed deductibility.  I appreciate the response, but I need advice on the software, not on my taxes.  Thank you.

Level 15
Jun 1, 2019 10:45:35 AM

In order for us to tell you how to enter the legal fees in TurboTax, you need to be more specific about the nature of the legal fees, so that we can figure out where they should go on your tax return. Do you have any information about the form or schedule that the deduction should appear on? Obviously there is no place to enter legal fees in general because in general legal fees are not deductible. In order to tell you how to enter the deduction we have to know the specific deduction that you are trying to claim.

New Member
Jun 1, 2019 10:45:36 AM

Publication 529, Page 5, the TIP on bottom left.  2nd to last paragraph in column 1.  Thank you.

Level 15
Jun 1, 2019 10:45:36 AM

If you are confident that your legal expenses are deductible and you are an employee so you can't deduct them on a Sch C, this is a work around:

Go to Income>Choose what to work on>Less Common Income>Misc income at bottom of the window>Other Reportable Income at bottom of widow>answer "Yes">Enter a description like "deductible legal expenses" and enter your expense as a negative number.  This will go to Sch 1 of the F. 1090 and deduct that amount from your AGI.