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posted Jun 4, 2019 4:55:21 PM

My lawyers file lawsuit vs Equifax for not reporting my credit correctly. Equifax paid me $5000 but I had to pay $4000 to the lawyer Are these $4000 in fees deductibles?

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Level 15
Jun 4, 2019 4:55:22 PM

Unfortunately, no.  The deduction for legal expenses was part of the miscellaneous itemized deduction subject to the 2% rule that was eliminated in tax reform.

At 15% or 22% tax, you look to owe as much or more in tax than you got after expenses.  An 80% fee seems pretty outrageous to me, even without the change in the tax law.  I might have a talk with the attorney firm and suggest you will make a complaint to the bar association unless they renegotiate their fee.