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Lawsuit Payment
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ainsley101
Level 1
02-16-2023
12:54 PM
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I have a client who received a W2 and a 1099 MISC for a lawsuit. The 1099 MISC has a total amount in Box 3 as other income and in Box 10 an amount for proceeds paid to an attorney. Box 18 also has the total amount for state income. Can I deduct the amount of the proceeds from the attorney or is the client responsible for paying taxes on the total listed in Box 3?
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Just-Lisa-Now-
Level 15
02-16-2023
12:59 PM
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Probably not, TCJA took away the ability to deduct atty fees in most cases...you may want to do some more research (IRS deductible attorney fees) , depending on what the lawsuit was for, there are some exceptions.
♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
taxes96786
Level 9
02-17-2023
04:11 AM
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IRS rule (was) you can only deduct atty fee that deals with production of income but, the Lieden Tax Act eliminated 2% deductions on Sch A. I don't think any fees are deductible on 2022. You should do research at irs.gov
