You have a complicated scenario. If I’ve misunderstood part of it, please write back and provide additional information.
Can I deduct these expenses? Can I deduct my attorney fees?
There is no concern about deducting legal fees in a personal injury case involving physical harm or physical sickness, because the recovery is 100% tax free if the damages are limited to compensatory damages. There is no deduction for attorney’s fees, but there is no need to deduct those fees.
§ 104. Compensation for injuries or sickness (a) In general Except in the case of amounts attributable to (and not in excess of) deductions allowed under section 213 (relating to medical, etc., expenses) for any prior taxable year, gross income does not include—
(3) amounts received through accident or health insurance (or through an arrangement having the effect of accident or health insurance) for personal injuries or sickness TITLE 26—INTERNAL REVENUE CODE
Would the money I used to pay back the insurance companies for my medical bills be considered not taxable if it were paid prior to me putting it in my bank?
Yes, however claims for personal injury are not taxable.
Medical expenses are deductible on the money you re-paid.
Yes, you can deduct the medical expenses that were not covered by the insurance; however, your medical deductions are limited.
You may deduct only the amount of your total medical expenses that exceed 7.5% of your adjusted gross income. You figure the amount you're allowed to deduct on Schedule A (Form 1040). In addition, your total itemized deduction must exceed the standard deduction.
Will you have to file amended tax returns?
Yes, if you claimed the money a taxable you will. In addition, you will be able to claim the Medical deduction.
However, You must file an amended return within 3 years of the original filing date. So, your 2019 amended return would have to be filed by April 15th, 2023.
Can I Deduct Legal Fees on My Taxes?
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