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Are ERISA disability lawyer fees deductible? The ERISA

Are ERISA disability lawyer...

Are ERISA disability lawyer fees deductible? The ERISA lawyer says it's an above the line deduction but I can't find it on my form.

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

My insurance plan denied my disability benefits so I had to hire a lawyer. The insurance plan the paid the claim. The disability lawyer said the fees were 100% deductible but I don't know where to put it on the 1040 form.

Accountant's Assistant: Is there anything else important you think the Accountant should know?

I'm not sure.

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Answered in 7 minutes by:
3/27/2018
Carter McBride
Carter McBride, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,311
Experience: Adjunct Professor
Verified

Hey! I'm Carter, I'm a CPA and can help you out with this.

Yes, this is deductible fee. It's deductible on Form 1040 Schedule A as an other miscellaneous deduction.

Let me know if you need anything else. If not, please leave a rating. Thanks!

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Customer reply replied 4 months ago
When I put it in as other miscellaneous deduction in my automated system it generates an alternative minimum tax. what does that mean?
Customer reply replied 4 months ago
The disability lawyer said it was 100% deductible. Is that wrong? What about over the line?

It is not an above the line deduction.

Other miscellaneous deductions are AMT add backs, so it does have a chance to cause you to hit AMT as well.

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Customer reply replied 4 months ago
Does that mean it's not deductible? What about what the lawyer said?

It is deductible on Schedule A.

It just could affect your AMT.

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Customer reply replied 4 months ago
the lawyer was wrong

I wouldn't say he was wrong. You are getting a tax deduction for it. It just then gets added back when you calculate your alternative minimum tax.

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Customer reply replied 4 months ago
I don't understand. How does it figure out AMT?

AMT is pretty complicated and something your lawyer did not consider when advising you.

You calculate AMT on Form 6251, which is here: https://www.irs.gov/pub/irs-pdf/f6251.pdf

Basically, you start with your taxable income, then add back some of the deductions you had. In your case, it would be added back on line 5. You then calculate a new tax. If that tax is more than the tax that you are currently paying, you need to pay the difference.

Carter McBride
Carter McBride, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,311
Experience: Adjunct Professor
Verified
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