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J
john-kosmidis
February 1, 2023
Solved

Where do I deduct legal fees related to a harassment settlement that produced a 1099-MISC? Entering them in "Legal Fees" has no impact.

  • February 1, 2023
  • 2 replies
  • 0 views
The settlement was 40k, with about 30k of associated legal fees.
Best answer by DMarkM1

Some legal fees such as those related to certain employment cases, such as a claim of unlawful discrimination, a claim against the US government, or a claim made under the Social Security Act, are deducted as an adjustment to income.  

 

In TurboTax that will be a negative entry in the "Other Reportable Income" topic.  This will show in line 8z which flows to line 10 on Schedule 1 and line 8 on the form 1040.  

 

Here are the steps in online versions:

 

  1. Wages and Income left-hand menu
  2. Scroll to "Less Common Income"
  3. "Show More"
  4. "Start/Revisit" Miscellaneous Income
  5. "Start/Revisit" Other Reportable Income
  6. "Yes"
  7. Description "Whistleblower Legal Fees"
  8. Enter the amount as a negative number "-1000"

 

To see the entries on the forms in online versions:

 

  1. "Tax Tools" in the left hand menu
  2. "Tools"
  3. "View Tax Summary" in the main screen
  4. "Preview my 1040" in the left hand menu

2 replies

X
xmasbaby0
February 1, 2023

LEGAL FEES

 

https://turbotax.intuit.com/tax-tips/tax-deductions-and-credits/can-i-deduct-legal-fees-on-my-taxes/L98fUeOrM

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
J
john-kosmidisAuthor
February 1, 2023

Thanks. I saw that but it says to include it on the 1040, but doesn't indicate where in the software it can be entered.  

DMarkM1
DMarkM1Answer
February 1, 2023

Some legal fees such as those related to certain employment cases, such as a claim of unlawful discrimination, a claim against the US government, or a claim made under the Social Security Act, are deducted as an adjustment to income.  

 

In TurboTax that will be a negative entry in the "Other Reportable Income" topic.  This will show in line 8z which flows to line 10 on Schedule 1 and line 8 on the form 1040.  

 

Here are the steps in online versions:

 

  1. Wages and Income left-hand menu
  2. Scroll to "Less Common Income"
  3. "Show More"
  4. "Start/Revisit" Miscellaneous Income
  5. "Start/Revisit" Other Reportable Income
  6. "Yes"
  7. Description "Whistleblower Legal Fees"
  8. Enter the amount as a negative number "-1000"

 

To see the entries on the forms in online versions:

 

  1. "Tax Tools" in the left hand menu
  2. "Tools"
  3. "View Tax Summary" in the main screen
  4. "Preview my 1040" in the left hand menu
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