Avoiding the Plaintiff Double Tax

Since the tax law changes in 2018, many plaintiffs have faced unexpected tax burdens, paying more than they should on their settlements. The new rules have eliminated the ability to deduct legal fees, resulting in plaintiffs being taxed on both the settlement amount and the portion allocated to their legal fees. This issue affects various types of taxable damages, such as emotional distress, defamation, harassment, punitive damages, and interest. Fortunately, using trust strategies prior to settlement can help plaintiffs avoid this "double tax" scenario. In this session, we’ll guide plaintiff attorneys through the key information they need to ensure their clients are not overtaxed.

Key topics to be discussed:

• Impact of the plaintiff double tax on settlement outcomes
• When and how the double tax applies in different case types
• Effective strategies plaintiff attorneys can take to protect clients

This course is co-sponsored with myLawCLE.

Closed-captioning available