New Litigation Settlements Tax, Legal Fees No Longer Deductible

Beginning with January 1st, 2018, some changes to the tax code have changed how settlements are taxed and many plaintiffs will now be taxed on their gross recoveries, while attorney fees will no longer be deductible. For example, a plaintiff who settles for $100,000 will be taxed on that amount, regardless if they pay their lawyers $40,000 or more. In cases with bigger recoveries, the situation can look a lot…

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