I filed for extension in april because i didn't have this information but need to file by Oct 15th.

I paid around 750 dollars last year to consult lawyers regarding a threatening letter from a former employer related to company confidential information where they asked me to sign additional confidentiality agreements and threatened a bit. There was no lawsuit. The lawyer gave me advice, i paid them $750 and that was pretty much the end of it.

Form 529 says this and it's a legal expense that was incurred trying to defend against a former employer. BUT it doesn't where/which Line to deduct them.

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.

Publication 529 page 2 also says:

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.

It seems that the only way it can be deducted is through an "above-the-line" subtraction from the gross income (goes into Line7/1040), as adjustments to income into Line 36 of schedule 1 of 2018 Form 1040.

But Line 36 of Schedule-1 Form 1040 says:

On the dotted line next to line 36, enter the amount of your deduction and identify it as indicated. Attorney fees and court costs for actions involving certain unlawful dis-crimination claims, but only to the ex-tent of gross income from such actions (see Pub. 525). Identify as “UDC.”

So it suggests to put only "unlawful dis-crimination claims" as UDC.

Based on this the question is:

  • It seems evident that these $750 can be deducted as 529 clearly says "You can deduct legal expenses that are related to doing or keeping your job". where can one find how to go about deducting it?

  • which Line # and Form specifically to deduct it?

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Browse other questions tagged or ask your own question.