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I will be receiving $3,000 from a lawsuit and the court has awarded my attorneys $12,000. The company is trying to file a 1099 under my social security number in the amount of $15,000 instead of $3,000. If they file it for $15,000, do I have to pay taxes on $15,000?


ANSWER


The BIDaWIZ Team's Answer:

The attorney fees are correctly reported on the Form 1099-Misc. However, the attorney fees may be deductible on Schedule A if you itemize deductions as a miscellaneous deduction and the total amount exceeds 2% of your adjusted gross income. However, this all depends on the nature of the lawsuit. We would need to learn more from you. Is the settlement related to a physical injury?

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