Taxable damage legal fees are no longer deductible in many cases!
The 2018 tax bill has created an unintended tax issue for trial lawyers and their clients who settle Non-physical injury litigation. These awards, which are generally all taxable in nature, now are faced with the reality that the legal fees charge are NOT deductible on the clients tax return due to changes in the law. This doesn't apply to some areas of taxable damage litigation, but it certainly applies to many types of cases, such as wrongful imprisonment, defamation, insurance bad faith and legal malpractice.
Watch this short video to learn the basics and what you need to tell your client about the tax status and potential non-deduction of legal fees on the award or settlement of their case. To learn more go to http://wahlstromandassociates.com/.