PLEASE HELP!! tyty

[faithnlve]

What is the name of your state (only U.S. law)? vt. I agreed to settle on an amount of 53,750.00 in a suit action. Now my attorney was paid 12,500 from that settlement in which I agreed to. Here is where I am totally confused. I received a W-2 for 41,250.00(gross), the w-2 shows the deductions of the fed, state, and medicare. How am I suppose to claim the tax benefit of what I paid my attorney if my w-2 is only showing the gross amount I received and not the 12,500 they had sent to my attorney. thanks

 

[Antigone*]

What is the name of your state (only U.S. law)? vt. I agreed to settle on an amount of 53,750.00 in a suit action. Now my attorney was paid 12,500 from that settlement in which I agreed to. Here is where I am totally confused. I received a W-2 for 41,250.00(gross), the w-2 shows the deductions of the fed, state, and medicare. How am I suppose to claim the tax benefit of what I paid my attorney if my w-2 is only showing the gross amount I received and not the 12,500 they had sent to my attorney. thanks

There is no tax benefit. Paying your attorney is a expense that is not tax deductible.

 

[irsos]

There is no tax benefit. Paying your attorney is a expense that is not tax deductible.

DUH! Deducting an item on your tax return reduces you gross income to arrive at taxable income. By deducting the $12,500 from your total settlement of $53,750 - the amount paid the attorney WAS deducted. You cannot deduct it twice.

 

[LdiJ]

There is no tax benefit. Paying your attorney is a expense that is not tax deductible.

IRSOS gave the correct answer, but I would like to point out that your answer was not correct. Any legal fees associated with the gain of taxable income, are indeed deductible.

Therefore if the money paid to the attorney HAD been included in his gross income, then it would have been deductible. However, since it was deducted from his income pre-tax, its not.

 

[Antigone*]

IRSOS gave the correct answer, but I would like to point out that your answer was not correct. Any legal fees associated with the gain of taxable income, are indeed deductible.

Therefore if the money paid to the attorney HAD been included in his gross income, then it would have been deductible. However, since it was deducted from his income pre-tax, its not.

Thanks LdiJ, I do apologize I made an incorrect statement. My apologies to the OP as well.