I paid $7,500 to a personal injury settlement. Is the payment I made tax deductible?
Assuming that you mean legal fees, no. Under the new tax law, legal fees paid are no longer deductible, unless you are a business and it was paid as a business expense. If you mean that you settled a claim, it depends on your structure (whether you’re a business or just an individual) and on the facts of the case. Chances are that it is not deductible, but I recommend consulting a CPA with more information to ensure that’s the case for your specific situation.
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Answered by: David A. Caplan, CPA, is a sole practitioner in Lafayette Hill, Pa.