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New Member
posted Mar 18, 2023 7:30:32 PM

Settled with LTD in 2022 W2 received is showing full amount did not deduct fees paid to attorney. How do I get this corrected?

what form do I need to submit to show attorney responsible to pay taxes on settlement agreement? and show that I received less that what is being reported?

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1 Replies
Expert Alumni
Mar 18, 2023 7:50:07 PM

Attorney fees are not deductible by you in most cases. 

 

"If you were awarded money from a legal settlement or case, it's likely that the award amount will be taxable and should be included in your gross income reported to the IRS. Generally, the only exception is if the money was awarded to you as a result of a lawsuit for physical injury or sickness. But even then, there are other rules and exemptions that may apply, as outlined by the IRS. In most instances, the attorney fees from these cases can't be deducted from your taxes."

 

TurboTax 

 

“Legal expenses that you incur in attempting to produce or collect taxable income or that you pay in connection with the determination, collection, or refund of any tax are miscellaneous itemized deductions and are no longer deductible.”

 

IRS