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mcdba44301230
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Are legal fees deductible? My wife was accused of a felony and had her teaching credentials suspended.The fees were for her legal defense.

 
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DDollar
Level 7

Are legal fees deductible? My wife was accused of a felony and had her teaching credentials suspended.The fees were for her legal defense.

Yes, legal fees are deductible as a Miscellaneous Itemized Deduction, and is subject to the 2% rule.  In order to claim a deduction for legal fees you must itemize your deductions.  Additionally, the deduction is allowed only for the amount that is more than 2% of your Adjusted Gross Income (AGI). 

Example: If your AGI is $80,000, your expenses would have to be more than $1,600 ($80,000 x 2%). Even then, you could only deduct the amount over $1,600. So, if your miscellaneous deductions were $2,000 you could only deduct $400 ($2,000 - $1,600).



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DDollar
Level 7

Are legal fees deductible? My wife was accused of a felony and had her teaching credentials suspended.The fees were for her legal defense.

Yes, legal fees are deductible as a Miscellaneous Itemized Deduction, and is subject to the 2% rule.  In order to claim a deduction for legal fees you must itemize your deductions.  Additionally, the deduction is allowed only for the amount that is more than 2% of your Adjusted Gross Income (AGI). 

Example: If your AGI is $80,000, your expenses would have to be more than $1,600 ($80,000 x 2%). Even then, you could only deduct the amount over $1,600. So, if your miscellaneous deductions were $2,000 you could only deduct $400 ($2,000 - $1,600).



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