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How to Use Legal Fees as a Tax Deduction

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From Quick Guide: Legal Advice

Summary: Legal fees incurred to keep a job or to settle title disputes are deductible on a tax return. Understand all the important details of what can and can not be claimed as deductions in relation to legal fees on a tax return with tips from an experienced tax professional in this free video on tax deductions.

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By Kristen Brand
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Kristen Brand has over eight years of accounting experience. She is a CPA in Florida and is a practitioner in Florida's Certified Audit Program for sales and use tax. This designation...read more

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Video Transcript

"Have you ever been behind a bus, and seen those advertisements for attorneys? Well hopefully, you won't have to call one, but if you do, there's a chance you may be able to deduct the legal fees. I'm Kristin Brand, and I'm going to talk to you about how to use legal fees, as a tax deduction. Typically, you've got to use legal fees, in order to actually make some money, so if you have to hire a lawyer, to keep your job, or to do your job, that's one thing that you can actually deduct. Also, if you need to use it to collect Social Security, or in some kind of alimony dispute, or also, if you have a title dispute. Those kinds of legal fees are actually deductible. If you're having trouble selling your house in a market, like everyone else is right now. If you need a lawyer, that's included in that selling expense, you can deduct that as well. Let me show you where it goes on the form.If you'll look at Schedule A, of the Form 1040, this is where you'll put your itemized deductions. There's actually a spot at the bottom of the form, for other miscellaneous deductions. This is where your legal fees would go. The other thing to keep in mind, is to always keep proper documentation, of the expenses that you do incur, so you could support them, in the case of a review. I'm Kristin Brand, and that is how you'll deduct legal fees, on your tax return."

eHow Article: How to Use Legal Fees as a Tax Deduction

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