since this is a federal lawsuit, For tax purposes, you should retain copies of your payment and promptly notify us of any changes to your mailing address. No taxes have been withheld from these monies although they constitute taxable income for the taxable year 2019. We will be sending you an IRS 1099-MISC Form in late January 2020, if your damage monies exceed $600 for the full gross amount of the damages portion (inclusive of the 25% contingency attorneys' fees paid), so that you can properly report and pay your income taxes. The attorneys’ fees that you paid are deductible in their full amount, regardless of whether or not you itemize other deductions. The deduction is “above the line,” meaning that it is not taxable income to you. This is a result of §703 of the Civil Rights Tax Relief Act, which was signed into law on October 22, 2004. If you have any questions concerning the tax implications of this payment, we encourage you to seek advice from your personal tax consultant. If you have tax questions, please contact your tax preparer or other tax professional.
