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Are ERISA disability lawyer fees deductible? The ERISA

Second opinion] Are ERISA...

Second opinion] 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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Customer reply replied 3 months ago
This is what the disability lawyer sent me.
Answered in 1 hour by:
3/27/2018
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,180
Experience: Former IRS Revenue Agent
Verified

I'm Fiona, former IRS revenue agent. I am looking at your question and will get back to you soon. Fiona Chen, MPA, Ph.D., CPA, ABV, CFF, CITP,IMTA

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Customer reply replied 3 months ago
okay thank you

Dear Customer,

According to IRS publications 529 and 525, you deduct the attorney fees for discrimination lawsuit on Line 36, first page, of Form 1040. That is the total adjustment amount line. Just add in that line with all the other adjustments you have on first page of Form 1040.

Enclosed below are quotations and website link for your further information.

Regards,

Fiona

"Unlawful discrimination claims.

You may be able to deduct, as an adjustment to income on Form 1040, line 36, or Form 1040NR, line 35, rather than as a miscel-laneous itemized deduction, attorney fees and court costs for actions settled or decided after October 22, 2004, in-volving a claim of unlawful discrimination, a claim against the U.S. Government, or a claim made under section 1862(b)(3)(A) of the Social Security Act. However, the amount you can deduct on Form 1040, line 36, or Form 1040NR, line 35, is limited to the amount of the judgment or settlement you are including in income for the tax year. See Pub. 525 for more information."

https://www.irs.gov/pub/irs-pdf/p525.pdf

"Deduction for costs involved in unlawful

discrimination suits.

You may be able to de-

duct attorney fees and court costs paid to re-

cover a judgment or settlement for a claim of

unlawful discrimination under various provisions

of federal, state, and local law listed in Internal

Revenue Code section 62(e), a claim against

the United States government, or a claim under

section 1862(b)(3)(A) of the Social Security Act.

You can claim this deduction as an adjustment

to income on Form 1040, line 36. The following

rules apply.

The attorney fees and court costs may be

paid by you or on your behalf in connection

with the claim for unlawful discrimination,

the claim against the United States govern-

ment, or the claim under section 1862(b)

(3)(A) of the Social Security Act.

The deduction you are claiming can't be

more than the amount of the judgment or

settlement you are including in income for

the tax year.

The judgment or settlement to which your

attorney fees and court costs apply must

occur after October 22, 2004."

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Customer reply replied 3 months ago
does a disability count under discrimination
Customer reply replied 3 months ago
which line on the 1040 should it go
Customer reply replied 3 months ago
line 36 is a total line. i'm not seeing what line to use

Dear Customer,

The IRS instructions say use Line 36. I have explained that use that line with other summary of adjustments you may have.

I have no context to explain back to you which part of your settlement belong to which category. You are the one with a letter from your attorney explaining to you the context about your settlement.

Regards,

Fiona

Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,180
Experience: Former IRS Revenue Agent
Verified
Dr. Fiona Chen and 87 other Tax Specialists are ready to help you
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