How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Robin D. Your Own Question

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7463
Experience:  15years with H & R Block. Divisional leader, Instructor
14155347
Type Your Tax Question Here...
Robin D. is online now
A new question is answered every 9 seconds

If a person wins a settlement and was issued a check for part

Resolved Question:

If a person wins a settlement and was issued a check for part of the awarded monies and the other portion went to the attorney for fees incurred how would I file the 1099 that the company who was sued issued to me. When they issued the monies they issued 2 separate checks. One for me and one for the attorney.
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Robin D :

Hello and thank you for using Just Answer,

Robin D :

The total on the 1099, does it have the attorney share listed too.

Robin D :

The system advises that you are online. Could you respond please if you are?

Robin D :

I will go with the assumption that the attorney's portion is showing on your 1099 along with your portion.

Robin D :

You are allowed to deduct legal fees related to producing or collecting taxable income or getting tax advice. You would show these fees that were paid to the attorney on Schedule A. They are subject to the 2% AGI floor. This means that the fees that are more than 2% of your Adjusted Gross Income will be the amount that will be used to add to all the other Schedule A items. If you do not itemize your deductions you will not be allowed to subtract the legal fees from the 1099 amount.

Robin D :

Hi

Robin D :

I will give you a moment to read then you can follow up if you have a question.

Robin D :

Were you able to view the entire post from me?

Customer:

Thank you so much for this information. The 1099 does show that the gross proceeds were paid to an attorney but the company issued my portion to me in a check from their company. So I should be able to file through the IRS E-Z file as long as I go with the long form. Otherwise I should go to a person who specializes in this field and have them complete my taxes this year.

Robin D :

What was this payment made to you for? Did you sue because you were injured?

Robin D :

Not all awards from court proceedings are taxable.

Customer:

It was wrongful termination and defammation of character. They had to change my termination to resignation and I was awarded the back wages that was due me plus some for pain and suffering. $5,000.00 of this was for back wages which I received a normal W-2, but the amount of $20,000 was paid to the lawyer on a 1099-Misc, which I was only issued $8,000 of that. The W2 I agree with and understand that but the 1099 is confusing to me.

Robin D :

The 1099MISc would have been for the pain and suffering portion because only the back wages could be reflected on the W2.
The 1099 portion is taxable to you and you will need to enter this a s other income. The portion that was paid to the attorney you would enter on the Schedule A. You say but the amount of $20,000 was paid to the lawyer on a 1099-Misc this sounds like you did not receive a 1099 in your name but the attorney did.
If that is the case then you need only add the $8000 to your Other Income (line 21) and that is it.

Robin D :

If you did receive the 1099 in your name then you use the Schedule A.

Robin D :

On the Schedule A you enter the amount that was split with the attorney from the Schedule A.

Robin D :

Using the schedule A is only done if you received the 1099 and the $20000 was on the 1099 (looking like you were paid the whole amount).

Customer:

Wonderful, because the 1099 Miscellaneous income was written out with my name on it and my SS # XXXXX XXXXX it as well so I believe that they issued it to me, but with the notation in box 14 Gross proceeds paid to an attorney. So if I am understanding you correctly the only amount I will have to declare and pay taxes on is the 8,000.00 as long as I file a Schedule A?

Robin D :

You need to use the Schedule A if they have the entire amount on the 1099 even if in box 14. They should not have issued the 1099misc to you with the amount in box 14, you are not the attorney. They actually should have listed in it box 3 and then you just use the Schedule A to deduct for the attorney.

Robin D :

If the company will not issue a corrected 1099MISC then you need to enter the total on the line 21 of the 1040 and then use the Schedule A to report the amount paid to the attorney from the $20,000.

Customer:

Thank you very much for your responses. They are very informative and I will contact them to ask them to correct their error. Thank you again and have a great day.

Robin D :

Your positive rating is always thanks enough.

If you could also participate in the very short survey that Just Answer will send you by e-mail I would appreciate that very much.

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7463
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.