Justin94
Level 2

Where do you input legal expenses in Lacerte 2018 and 2019 that are related to doing or keeping your job? Publication 529 says that they are deductible, but doesn't indicate where they should be deducted

0 Cheers
qbteachmt
Level 15

"Related" means what? An unlawful discrimination case? Whistleblower? Or, if not, then I think you mean this:

https://www.irs.gov/publications/p529#en_US_2019_publink10004393

Which is "related to business" on Sched C or E or F, not as an employee. The TCJA changed it.

"You can deduct legal expenses that are related to doing or keeping your job, such as those you paid to defend yourself against criminal charges arising out of your trade or business.

You can deduct expenses of resolving tax issues relating to profit or loss from business (Schedule C), rentals or royalties (Schedule E), or farm income and expenses (Schedule F) on the appropriate schedule. Expenses for resolving nonbusiness tax issues are miscellaneous itemized deductions and are no longer deductible."

And here:

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

 

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Justin94
Level 2

Thanks for your reply--the taxpayer is a doctor that incurred legal expenses to defend their medical license in a conflict with a state regulatory agency--needed to keep the license in order to keep their W-2 job--not a Schedule C/E/F issue. 

 

That section of Pub 529 is a little confusing which prompted my question

 

If it was to defend against criminal charges to keep your W-2 job, where is that deducted?

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BobKamman
Level 15

Sometimes it helps to read the complete publication and not just the paragraphs that describe what used to be and may return. 

This publication explains that you can no longer claim any
miscellaneous itemized deductions, unless you fall into
one of the qualified categories of employment claiming a
deduction relating to unreimbursed employee expenses.
Miscellaneous itemized deductions are those deductions
that would have been subject to the 2% of adjusted gross
income limitation.

You can no longer claim a deduction for unreimbursed
employee expenses unless you fall into one of the following categories of employment, or have certain qualified
educator expenses.
• Armed Forces reservists.
• Qualified performing artists.
• Fee-basis state or local government officials.
• Employees with impairment-related work expenses.

George4Tacks
Level 15
BUT, it may be deductible on the state tax return, so do the input anyway.

Answers are easy. Questions are hard!
BobKamman
Level 15

Not to mention, TCJA 2017 might be repealed retroactively by a new Congress and President in six months.  

qbteachmt
Level 15

The employer should be paying, then.

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dkh
Level 15

by a new Congress and President in six months.  

I'd give you three cheers if the program would allow.