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Yes, your attorney fees are deductible to the extent of your taxable income.
For instance, if 50% of Social Security income is taxable, then 50% of legal fees are deductible.
To deduct legal fees, you must itemize deductions on Schedule A, and the sum total of your miscellaneous deductions including your legal fees must exceed 2% of your Adjusted Gross Income.
Given the above limitations you may not be able to benefit from your legal expenses.
To deduct legal fees:
Type in legal expenses, deduction the search box, top right of your screen, then click the magnifying glass
Click the jump to legal expenses, deduction link in the search results
Follow to prompts and online instructions
Yes, your attorney fees are deductible to the extent of your taxable income.
For instance, if 50% of Social Security income is taxable, then 50% of legal fees are deductible.
To deduct legal fees, you must itemize deductions on Schedule A, and the sum total of your miscellaneous deductions including your legal fees must exceed 2% of your Adjusted Gross Income.
Given the above limitations you may not be able to benefit from your legal expenses.
To deduct legal fees:
Type in legal expenses, deduction the search box, top right of your screen, then click the magnifying glass
Click the jump to legal expenses, deduction link in the search results
Follow to prompts and online instructions
I thought this deduction was taken away last year? When I do that search a "jump" link does not appear.
I found this lawyer's summary incredibly helpful on the point. Whether the LTD benefits are considered income depends on a few factors (grab your pay stub!). And if it is considered income, and the LTD benefits were paid in response to an ERISA denial, attorney fees and costs may be deductible above-the-line.
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