My Lemon Law settlement was broken down to me as follows.
The civil penalty was then broken down with 1/3 going to the attorney.
Finally a total for the attorney and a total for me.
How much of this will be taxed?
Can I claim the attorneys fees? If so is the 1/3 of the civil penalty included in this? Or am I taxed on the full civil penalty award?
What version of Turbo Tax will be needed to cover this?
Thank you
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Yes, the entire amount received that is in "excess" of your refund is taxable income, including punitive damages (penalties). The portion that is restitution is not taxable. Form 1099-MISC that you received should have all the information you need. Any version of TurboTax for Desktop can be used to report this income.
The attorney fees, which includes any amount paid to the attorney, may be claimed under the Deductions and Credits >> Other Deductions >> Legal Fees.
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