t*****8
发帖数: 363 | 1 What is the deduction for legal fees?
You can deduct legal expenses if they relate to your employment or business.
You can also deduct legal expenses related to items that produce taxable
income, such as rental property and other investments, and legal fees in
connection with an income tax dispute. | t*****8
发帖数: 363 | 2 Do I qualify for the legal fees deduction?
Eligibility requirements
Eligible expenses include:
- Court costs and attorney fees related to either doing or keeping your job
, including back pay, injury to reputation, and unlawful discrimination
claims
- Costs of collecting taxable alimony or arranging details of alimony
payments
- Fees for tax advice related to a divorce, if the bill specifies how much
is for tax advice. You cannot deduct any other legal fees related to a
divorce or child support since they are personal expenses not related to
taxable income.
- Fees for personal injury actions where you recover taxable damages
- Estate tax planning fees related to tax planning or income-producing
property
- Costs of collecting taxable Social Security benefits
- Fees to recover income-producing property such as stocks or bonds loaned
as collateral
Legal expenses you cannot deduct include:
- Expenses for personal lawsuits unless you recover taxable damages
- Legal fees for personal injury awards that are tax-free
- Legal costs related to the acquisition or determination of title to
property. However, you may add these costs to the basis of the property,
which becomes important when you sell the property, or if you depreciate it.
- The costs of contesting a will. This is because an inheritance is not
taxable income.
- Legal fees for divorce or child support actions, other than those stated
above as eligible.
Limitations of this deduction
- Deduct most eligible legal fees as a miscellaneous expense on Schedule A
(see Special circumstances below for exceptions). Miscellaneous expenses
also include job-related expenses and investment expenses. You can deduct
only miscellaneous expenses that are more than 2% of your adjusted gross
income (AGI).
Example: If your adjusted gross income is $60,000 and you have $2,000 in
miscellaneous expenses, you can't deduct the first $1,200 ($60,000 x 2%).
You can deduct the remaining $800 ($2,000 - $1,200 = $800).
- You will not get the benefit of this deduction if you're subject to the
alternative minimum tax (AMT).
Special circumstances
- Recovery of income earned on inherited property. You can deduct the
portion of legal fees related to recovering the taxable income earned on
property involved in a disputed inheritance.
Example: You inherited rental property that your parents owned. There was
dispute among you and your siblings as to ownership. You can deduct the
legal fees connected to the income earned on the property (but not the
portion of the legal fees related to the value of the property itself).
- Collecting Social Security. You can deduct the percentage of legal fees
related to your Social Security benefits that are taxable.
Example: If you hire an attorney to help you claim Social Security benefits,
50% of which are taxable, you can claim 50% of the legal fees you paid the
attorney.
- Disputed income tax. You can deduct related fees, such as the fees you
paid to an attorney who assisted you with a dispute regarding an income tax
return you filed.
- Employment cases. You may be able to deduct legal fees related to certain
employment cases, such as a claim of unlawful discrimination, a claim
against the U.S. government, or a claim made under the Social Security Act,
as an adjustment to income. These fees are not limited to 2% of your AGI or
subject to phase-out for AMT purposes as discussed in the Limitations
section above.
What paperwork do I need for the legal fees deduction?
For your records, keep copies of legal bills showing the allocation of fees
related to deductible and non-deductible services.
Deductions related to the legal fees deduction
- Investment Expenses Deduction
More information about the legal fees deduction
For more information, see:
- IRS Publication 529, Miscellaneous Deductions
- IRS Publication 17, Chapter 28, Miscellaneous Deductions
- IRS Publication 17, Chapter 18, Alimony
- IRS Publication 915, Social Security and Equivalent Railroad Reitrement
Benefits | P*******Y
发帖数: 1038 | 3 很好的省钱提议，不过雇主sponsor但是自己掏钱找律师的律师费，要不要claim是一个
问题，因为这些钱本来应该是雇主出的。
job
much
【在 t*****8 的大作中提到】
: Do I qualify for the legal fees deduction?
: Eligibility requirements
: Eligible expenses include:
: - Court costs and attorney fees related to either doing or keeping your job
: , including back pay, injury to reputation, and unlawful discrimination
: claims
: - Costs of collecting taxable alimony or arranging details of alimony
: payments
: - Fees for tax advice related to a divorce, if the bill specifies how much
: is for tax advice. You cannot deduct any other legal fees related to a
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