Settlement Tax Planning

Plaintiff Recovery Trust: How to Double or Triple a Plaintiff’s After-Tax Net Recovery

Two Powerful Tax-Saving Strategies for Taxable Settlements Are you an attorney or a plaintiff dealing with a settlement that will be taxable (meaning the plaintiff will have to pay income taxes on the recovery)? Are you concerned about the hefty tax burdens that can...

How Structured Settlement Annuities Help Plaintiffs in Taxable Cases

If you’re a plaintiff navigating a legal settlement, you may be wondering how much money you’ll actually get to keep after taxes and legal fees. Getting a legal settlement or judgment often sounds like you’ll be getting a windfall of cash. But you may be surprised…

Are Punitive Damages Taxable? Here’s What the IRS Says

If you’re involved in a lawsuit that may include punitive damages, you may be wondering, “Are punitive damages taxable?”. This is a great questions that many plaintiffs have when navigating legal settlements. In this article we’ll be…

Do You Pay Taxes on Lawsuit Settlements? 5 Common Examples

Settlement taxes can be confusing, and paying taxes on lawsuit settlements is a reality many plaintiffs face. In this article, we will walk through the tax implications of five common types of legal settlements so you can see which…

Are Settlements Taxable? A Comprehensive Overview for Plaintiffs

Some types of settlements are completely tax-free, while others get hit hard with taxes. And there are some significant pitfalls to watch out for. In this comprehensive overview, we’ll share seven tips and pointers for determining if your settlement is taxable. And if your settlement IS taxable, we’ll...

How the Tax Cuts and Jobs Act Created the Plaintiff Double Tax Trap

The Tax Cuts and Jobs Act (TCJA) of 2017 had a significant impact on plaintiffs receiving taxable settlements. Prior to this change in the law, plaintiffs could list their attorney's fees as a deduction on their tax returns, avoiding paying tax on the attorney fee portion. However, the TCJA changed this. Now, individual plaintiffs cannot claim...

When a Legal Recovery is Considered Taxable to the Client

Introduction: As a plaintiff attorney, it is important to ensure that a client will get a fair amount out of their settlement award. Unfortunately, for taxable damages cases, clients have to pay taxes on the amount that they will receive and the attorney’s fee portion of the case. But there are tax planning strategies that can help clients...

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