On Feb 10, 9:46 am, "Dan" <9...[at]w233333.net> wrote:

- quote -

It looks like your employer paid the attorney fees for you, but the
amount of the fees is like a bonus, so it is taxable as Other Income.

It would be nice if you can subtract the attorney fees from the
settlement amount, but unfortunately that is not the rule.

If you paid the attorney fees and your attorney returned the fees to
you in the same year, do nothing. If you paid the attorney fees in a
previous year and deducted them -- fees related to income/employment
are deductible subject to the 2% of AGI limit, see
http://www.wwwebtax.com/deductions_m...legal_fees.htm --
then when you were returned the fees you should add them to Other
Income, and in my opinion only add the amount that is over 2% of your
AGI, although if you received no benefit from the deduction because of
the AMT, then don't add the fees to Other Income. Anyway, this kind
of sucks, because your W2 income puts you in a higher tax bracket, so
the recovery/refund of attorney fees is taxable at a higher rate.

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I received an attorney-assisted severance package from my former
employer last year. I paid my attorney fees from my own pocket as I
was billed. In the end, I received my severance package and my
attorney was directly paid for my attorney fees by my former employer,
and my attorney refunded the fees that I had paid.

I received a W2 from my former employer for the severance amount, plus
a 1099-Misc for the attorney fees. Should the 1099-Misc have gone to
my attorney. Am I going to have to claim his attorney fees as income?
Thanks!

--

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >