legal fees

[jc238]

I incurred legal fees in to protect and keep my job and to defend myself against false claims.

An investigation was conducted and the claims were determined to be false and without merit.

Can I deduct the legal fees paid to defend and retain my job?

[ColeenD3]

NO, TCJA no longer allows this deduction.

In December 2017, Congress passed the largest tax reform bill in over 30 years. Included in the bill was the suspension (repeal) of several federal deductions for tax years 2018–2025, which we've summarized below.

Keep in mind: While some states are following the IRS's lead by suspending the same deductions, other states have decided to keep certain tax breaks mentioned below. When you go through your state return, we'll make sure to include any tax deductions that are still valid in your state.

Personal and dependent exemptions

Employee expenses and other miscellaneous deductions subject to the 2% limit

Moving expenses

Home equity loans and lines of credit

Personal casualty and theft losses

Business meals and entertainment

Donations in exchange for sports tickets

Qualified Bicycle Commuting Reimbursement

[jc238]

I found this article "12 Ways to Deduct Legal Fees Under New Tax Laws" by Robert W. Wood and it appears that certain legal expenses within section 62(e)(18) may be deductible.

The author points out in the new tax code there is a "catchall provision" that makes a deduction for legal fees available for claims alleged under: any provision of federal, state or local law, or common law claims permitted under federal, state or local law, that provides for the enforcement of civil rights, or regulates any aspect of the employment relationship, including claims for wages, compensation, or benefits, or prohibiting the discharge of an employee, discrimination against an employee, or any other form of retaliation or reprisal against an employee for asserting rights or taking other actions permitted by law.

In conclusion under the new tax code, some job related legal fees may be deductible. 

[macuser_22]

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@jc238 wrote:

I found this article "12 Ways to Deduct Legal Fees Under New Tax Laws" by Robert W. Wood and it appears that certain legal expenses within section 62(e)(18) may be deductible.

The author points out in the new tax code there is a "catchall provision" that makes a deduction for legal fees available for claims alleged under: any provision of federal, state or local law, or common law claims permitted under federal, state or local law, that provides for the enforcement of civil rights, or regulates any aspect of the employment relationship, including claims for wages, compensation, or benefits, or prohibiting the discharge of an employee, discrimination against an employee, or any other form of retaliation or reprisal against an employee for asserting rights or taking other actions permitted by law.

In conclusion under the new tax code, some job related legal fees may be deductible. 

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For 2019-2025 the only legal fees that are deductible for an employee are for a unlawful discrimination lawsuit.  Which is what section 62(e)(18) refers to.

See IRS Pub 529  page 11

https://www.irs.gov/pub/irs-pdf/p529.pdf

That is an "above the line" deduction not supported by TurboTax but can be entered in the forms mode on the desktop products.