As Tax Champ @ee-ea says you can subtract legal fees paid for unlawful discrimination claims. You will need to move to TurboTax CD/Download. How do I switch from TurboTax Online to TurboTax CD/Download? Here's how to do it: Select Forms in the top right In the left column (Forms in My Return) tap Schedule 1 Highlight line 24h and tap the magnifying glass Scroll up to the Other Adjustments to Income Smart Worksheet between lines 23 and 24 Enter your amount on line K You may be able to deduct, as an adjustment to income on your Schedule 1 (Form 1040), attorney fees and court costs for actions settled or decided after October 22, 2004, involving a claim of unlawful discrimination, a claim against the U.S. Government, or a claim made under section 1862(b)(3)(A) of the Social Security Act. However, the amount you can deduct on your Schedule 1 (Form 1040), is limited to the amount of the judgment or settlement you are including in income for the tax year.

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nuyorquinosr

Solved

Legal Fees related to unlawful discrimination claims

Forum|Forum|4 years ago
March 13, 2022
2 replies
0 views

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TurboTax Deluxe Online

Best answer by ErnieS0

As Tax Champ @ee-ea says you can subtract legal fees paid for unlawful discrimination claims. You will need to move to TurboTax CD/Download.

How do I switch from TurboTax Online to TurboTax CD/Download?

Here's how to do it:

Select Forms in the top right
In the left column (Forms in My Return) tap Schedule 1
Highlight line 24h and tap the magnifying glass
Scroll up to the Other Adjustments to Income Smart Worksheet between lines 23 and 24
Enter your amount on line K

You may be able to deduct, as an adjustment to income on your Schedule 1 (Form 1040), attorney fees and court costs for actions settled or decided after October 22, 2004, involving a claim of unlawful discrimination, a claim against the U.S. Government, or a claim made under section 1862(b)(3)(A) of the Social Security Act.

However, the amount you can deduct on your Schedule 1 (Form 1040), is limited to the amount of the judgment or settlement you are including in income for the tax year.

ee-ea

Employee

Allowable as an adjustment to income. 26USC62(20)

https://irc.bloombergtax.com/public/uscode/doc/irc/section_62?trackingcode=BTAX18523

ErnieS0Answer

As Tax Champ @ee-ea says you can subtract legal fees paid for unlawful discrimination claims. You will need to move to TurboTax CD/Download.

How do I switch from TurboTax Online to TurboTax CD/Download?

Here's how to do it:

Select Forms in the top right
In the left column (Forms in My Return) tap Schedule 1
Highlight line 24h and tap the magnifying glass
Scroll up to the Other Adjustments to Income Smart Worksheet between lines 23 and 24
Enter your amount on line K

However, the amount you can deduct on your Schedule 1 (Form 1040), is limited to the amount of the judgment or settlement you are including in income for the tax year.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

jbg6126

Very helpful. The TT step by step response would lead you believe legal fees are not deductible on the Federal return. If the goal of TT is to get you the max return this deduction should be built into the step by step software. It is very easy to not to include this deduction even though the tax code allows it under certain circumstances if you just rely on the software response as a guide.