Attorney fees are only deducted for certain types of settlements.
For more information: IRS Tax implications of settlements and judgments
Assuming I understand correctly, the Bumble class action was a securities lawsuit.
Because the entire settlement — including attorneys' fees — will generally be income to the claimant, the full amount must be reported as paid to the claimant.
Enter a 1099-MISC for lawsuit settlement:
- Open or continue your return.
- Navigate to the 1099-MISC section:
- TurboTax Online/Mobile: Go to 1099-MISC.
- TurboTax Desktop: Search for 1099-misc and select the Jump to link.
- If you're asked Did you get a 1099-MISC?, answer Yes.
- If you've already entered a 1099-MISC, select Add another 1099-MISC.
- Enter the information from your 1099-MISC and select Continue.
- On the Describe the reason for this 1099-MISC screen, enter lawsuit settlement and select Continue.
- On the Does one of these uncommon situations apply? screen, select This was money from a lawsuit settlement and then answer the back wages question before selecting Continue.
TurboTax FAQ: Where do I enter an award from a taxable legal settlement?
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