I recently revisited my 2018 Federal Tax filing. I came back to it as a result of reviewing why my legal fees incurred as part of a successful settlement are not deemed to be tax deductible even though a 1/3 settlement check was cut directly to my attorney and was taken off my net settlement check.
I would assume that my attorney reported it as Business Income and subsequently paid income taxes on it.
Isn't that double taxation?
Legal fees used to be deductible as a miscellaneous itemized deduction.
Most of the miscellaneous itemized deductions were eliminated starting with 2018 returns.
So it is currently treated as a personal and nondeductible expense.
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