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sharries
New Member

legal fees

I paid an attorney to review my claim of workplace discrimination.  I did not go forward with the suit.  can i claim this fee as a deduction?

 

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Accepted Solutions
LenaH
Employee Tax Expert

legal fees

No. In order to deduct costs involved in unlawful discrimination suits, it must be paid in connection with a lawsuit. A review of your case would not qualify. 

 

Per IRS Publication 525 Taxable and Nontaxable Income, page 30:

 

Deduction for costs involved in unlawful discrimination suits. You may be able to deduct attorney fees and court costs paid to recover a judgment or settlement for a claim of unlawful discrimination under various provisions of federal, state, and local law listed in Internal Revenue Code section 62(e), a claim against the United States government, or a claim under section 1862(b)(3)(A) of the Social Security Act. You can claim this deduction as an adjustment to income on Schedule 1 (Form 1040), line 36. The following rules apply.

  • The attorney fees and court costs may be paid by you or on your behalf in connection with the claim for unlawful discrimination, the claim against the United States government, or the claim under section 1862(b)(3)(A) of the Social Security Act.
  • The deduction you are claiming can't be more than the amount of the judgment or settlement you are including in income for the tax year.
  • The judgment or settlement to which your attorney fees and court costs apply must occur after October 22, 2004.
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1 Reply
LenaH
Employee Tax Expert

legal fees

No. In order to deduct costs involved in unlawful discrimination suits, it must be paid in connection with a lawsuit. A review of your case would not qualify. 

 

Per IRS Publication 525 Taxable and Nontaxable Income, page 30:

 

Deduction for costs involved in unlawful discrimination suits. You may be able to deduct attorney fees and court costs paid to recover a judgment or settlement for a claim of unlawful discrimination under various provisions of federal, state, and local law listed in Internal Revenue Code section 62(e), a claim against the United States government, or a claim under section 1862(b)(3)(A) of the Social Security Act. You can claim this deduction as an adjustment to income on Schedule 1 (Form 1040), line 36. The following rules apply.

  • The attorney fees and court costs may be paid by you or on your behalf in connection with the claim for unlawful discrimination, the claim against the United States government, or the claim under section 1862(b)(3)(A) of the Social Security Act.
  • The deduction you are claiming can't be more than the amount of the judgment or settlement you are including in income for the tax year.
  • The judgment or settlement to which your attorney fees and court costs apply must occur after October 22, 2004.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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