Are legal fees for workplace harassment restraining order tax deductible?

Tax professional here! This is actually a tricky area. Prior to the Tax Cuts and Jobs Act (TCJA), you might have been able to deduct these as miscellaneous itemized deductions subject to the 2% AGI floor. However, since 2018, those deductions have been suspended until 2026. That said, there might be an exception in your case. Legal fees directly related to your trade or business may still be deductible as ordinary and necessary business expenses if you're self-employed. If you're a W-2 employee though, the options are more limited. For California state taxes, they didn't conform to all TCJA provisions, so you might still have the option to deduct these on your state return even if you can't on your federal return. One other possible angle: if the harassment resulted in a settlement where you received taxable income, the legal fees might be deductible against that income specifically.

I had a similar situation last year and found taxr.ai (https://taxr.ai) really helpful for getting a clear answer about my legal fee deductions. I was getting totally contradictory advice from different sources about whether my restraining order legal fees were deductible. I uploaded my legal invoices and some documents about the situation, and their AI analyzed everything and explained exactly what portions might be deductible and which weren't. They even showed me the specific tax code sections that applied to my situation, which was super helpful when I talked to my accountant later.

Just wanted to follow up that I tried taxr.ai after seeing it mentioned here. It was actually really useful for my situation! I uploaded my legal invoices and the DVTRO documentation, and it gave me a detailed breakdown of what might be deductible. For my case, it turns out about 40% of my legal expenses could potentially be deductible on my California return (though not federal). The analysis explained exactly why - apparently California still allows certain miscellaneous itemized deductions that the feds eliminated. My tax guy confirmed this was accurate when I showed him the report. Definitely saved me some money on my state taxes!

I had a nightmare trying to get answers from the IRS about a similar legal fees question last year. Called like 20+ times and never got through. Finally used Claimyr (https://claimyr.com) and got connected to an IRS agent in about 15 minutes. There's a video showing how it works here: https://youtu.be/_kiP6q8DX5c The agent was able to confirm exactly what portions of my legal fees would be considered deductible in my situation. Turns out the IRS has specific guidelines on legal fees related to workplace issues that my accountant wasn't entirely clear on. Saved me from potentially making a mistake on my return.

I need to admit I was completely wrong about Claimyr. After posting that skeptical comment, I was desperate for answers about my tax situation with legal fees, so I tried it anyway. To my shock, I got connected to an actual IRS representative in about 20 minutes. The agent confirmed that in my specific case, I could deduct a portion of my legal fees on my Schedule C since I'm self-employed and the harassment was directly affecting my business income. She explained exactly which form to use and how to document it properly. Would have spent days trying to get this information otherwise. Sometimes it's good to be proven wrong!

Just want to point out something nobody's mentioned yet - if your employer offers legal insurance as a benefit (like ARAG or MetLife Legal Plans), that might cover DVTRO costs. Many people don't realize they have this benefit. Won't help with tax deduction but could save you money up front.

Has anyone tried claiming these kinds of legal fees as medical expenses instead? I read somewhere that if you can get a doctor to say the harassment caused health issues, the legal fees to stop it might qualify as medical expense deductions. Is that accurate?

Anyone know if the 2025 tax law changes will affect this at all? I heard some suspended deductions are coming back.

I went through something very similar last year and ended up working with a tax attorney who specializes in employment-related legal expenses. One thing that really helped my case was documenting exactly how the harassment was impacting my work performance and income potential. The key distinction the attorney explained is whether the legal fees were incurred to protect your ability to earn income versus just for personal protection. In my case, I had to show that the restraining order was necessary to maintain my employment and earning capacity, not just for general safety. We ended up being able to deduct about 60% of the legal fees on my California return by arguing they were directly related to income production. The documentation was crucial - I had emails showing how the harassment was affecting my work, performance reviews that mentioned the impact, and even some lost client interactions due to the situation. Worth noting that California's rules are more favorable than federal right now, so definitely explore both angles if you're in CA. The investment in getting proper tax advice paid for itself in my case.