Lump-sum settlements often carry significant adverse tax consequences for the claimant. Often the tax bite makes taking a lump sum settlement less attractive than receiving monthly benefits. This can best be explained by an example. Consider a 45-year-old claimant whose gross LTD benefit is $2,750 and who is receiving Social Security disability benefits of $1,750 per month. Her net LTD … Read More
Tax Deduction of Attorney Fees in Employee Benefits Cases Remains Unchanged
Deductibility of Attorney Fees in Employee Benefits Cases Remains Unchanged The Tax Cuts and Jobs Act of 2017 changed the tax treatment of attorney fee and other litigation-related expenses incurred by individuals. Congress suspended the deductibility of litigation expenses as “miscellaneous itemized deductions” through December 31, 2025. As a result, the costs and attorney fees associated with non-business-related litigation may … Read More