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Retirement tax questions
Legal fees are considered gross income to the plaintiff. The concept is that you received the entire settlement, and then you paid the attorneys. You should enter the 1099 as is.
Unfortunately, most personal legal fees are not deductible. For an explanation of deductible and non-deductible legal fees, see Legal Expenses on Page 5 of this IRS Publication:
https://www.irs.gov/pub/irs-pdf/p529.pdf
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
March 22, 2021
8:18 AM