Legal fees are deducted in the
Deductions & Credits section:
- Federal Taxes
- Deductions and Credits
- Scroll down to Other
Deductions and Credits
- Select Legal Fees
Legal Fees you can deduct:
- Court
costs and attorney fees related to either doing or keeping your job,
including back pay, injury to reputation, and unlawful discrimination claims
- Costs of
collecting taxable alimony or arranging details of alimony payments
- Fees for
tax advice related to a divorce, if the bill specifies how much is for tax
advice. You cannot deduct any other legal fees related to a divorce or
child support since they are personal expenses not related to taxable
income.
- Fees for
personal injury actions where you recover taxable damages
- Estate
tax planning fees related to tax planning or income-producing property
- Costs of
collecting taxable Social Security benefits
- Fees
to recover income-producing property such as stocks or bonds loaned as
collateral
Legal fees you cannot deduct:
- Expenses
for personal lawsuits unless you recover taxable damages
- Legal
fees for personal injury awards that are tax-free
- Legal
costs related to the acquisition or determination of title to property.
However, you may add these costs to the basis of the property, which
becomes important when you sell the property, or if you depreciate it.
- The costs
of contesting a will. This is because an inheritance is not taxable
income.
- Legal
fees for divorce or child support actions, other than those stated above
as eligible.
