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I had a DoorDash legal settlement. There were legal fees incurred in the tax stub information they gave us, are those categorized as "legal and professional fees"?

 
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3 Replies
ee-ea
Level 15

I had a DoorDash legal settlement. There were legal fees incurred in the tax stub information they gave us, are those categorized as "legal and professional fees"?

Did you get paid for the settlement in 2021?

I had a DoorDash legal settlement. There were legal fees incurred in the tax stub information they gave us, are those categorized as "legal and professional fees"?

Yes, I was paid out for this settlement in 2021.

JamesG1
Expert Alumni

I had a DoorDash legal settlement. There were legal fees incurred in the tax stub information they gave us, are those categorized as "legal and professional fees"?

We are not able to see the tax stub to see what you were told.  They may very well be 'legal and professional fees'.

 

IRS Publication 529 page 5 states:

 

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. 

 

You can deduct legal expenses that are related to doing or keeping your job, such as those you paid to defend yourself against criminal charges arising out of your trade or business. 

 

You can deduct expenses of resolving tax issues relating to profit or loss from business reported on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship), from rentals or royalties reported on Schedule E (Form 1040),.........Expenses for resolving nonbusiness tax issues are miscellaneous itemized deductions and are no longer deductible.

 

@Rboguiren1
 

 


 

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