[rhood]

A couple of questions about the huge awards he claims to get for his clients:
1. Are the awards taxable ?
2. What is Dan’s cut ?
Thanks

[JGVillages]

Not sure on #1 but I believe #2 is usually around 30%.

[Woodbear]

Originally Posted by rhood

A couple of questions about the huge awards he claims to get for his clients:
1. Are the awards taxable ?
2. What is Dan’s cut ?
Thanks

Awards are not taxed

[Fredman]

Originally Posted by JGVillages

Not sure on #1 but I believe #2 is usually around 30%.

Try 40%

[Gpsma]

Originally Posted by Woodbear

Awards are not taxed

Not entirely true. Awards for economic and medical costs are not taxable. Awards that are punitive or for lost wages (except if caused by an injury) are taxable.

[collie1228]

Most "awards" are insurance claims, so there are no "punitive damages" involved. These guys seldom go to court, but they are effective in making reluctant insurance companies pay up. If you listen closely to their ads, in many of them they acknowledge as such.

[Luggage]

If you are truly looking for a lawyer you need one for the contract that they make you sign. Not only do they usually get a percentage but a lot of them will get a few thousand dollars or more for the paperwork involved and sometimes even up front. That's a huge problem for many poor people

[spinner1001]

Originally Posted by rhood

A couple of questions about the huge awards he claims to get for his clients:
1. Are the awards taxable ?
2. What is Dan’s cut ?
Thanks

The tax law is specific about taxation of settlements and court awards. In short, settlement proceeds and awards related to personal physical injury or personal physical sickness are not taxable and other settlement and award amounts are taxable (e.g., for lost earnings, punitive damages).
You might Google for the IRS documentation about taxation of settlements for personal injuries for details.

[Debra Freeman]

Criminal attorneys are generally awarded 30-40%. In regards to taxes; The general rule of taxability for amounts received from settlement of lawsuits and other legal remedies is Internal Revenue Code (IRC) Section 61 that states all income is taxable from whatever source derived, unless exempted by another section of the code.

[noslices1]

If you have an “open and shut” case against a large corporation with big insurance, I would think the fee would be negotiable. If the award would be in the hundreds of thousands of dollars or millions, They may work for a smaller percentage. If not, there may be other lawyers that will, like Morgan & Morgan.

[lkagele]

Originally Posted by noslices1

If you have an “open and shut” case against a large corporation with big insurance, I would think the fee would be negotiable. If the award would be in the hundreds of thousands of dollars or millions, They may work for a smaller percentage. If not, there may be other lawyers that will, like Morgan & Morgan.

'Open and shut' doesn't matter. Contingency fee applies to all settlements. 1/3 is standard but that % goes up if suit is filed and then goes up again if trial is required. The law firm also gets reimbursed for all costs and fees it spends on the case. Last stats I saw showed the average settlement sees around 65% go to legal expenses.

[Petersweeney]

This is bad advice…..

[Petersweeney]

Google Florida bar association for good advise….

[Lmvari]

Originally Posted by JGVillages

Not sure on #1 but I believe #2 is usually around 30%.

Villager & Florida licensed attorney. Personal injury awards are not taxable by Florida or IRS. Personal injury attorneys generally take 33 1/3% of personal injury awards if it settles & more if it goes to trial or on appeal.

I don’t practice in that field so don’t bash me for what others do.

[FredJacobs]

"Criminal' attorneys never charge a percentage because there is nothing to recover. Their charge is based on the time and complexity of the case. In civil court, the punitive damage portion of settlements and awards are taxable. Also, interest received as part of the award is taxable. Now comes the big one - remember that percentage 40% that you paid the attorney? That is not deductible.

Say you receive $1 million as an award and you paid the attorney $400 thousand as contracted. At this, point, most people think that they got $600 thousand free and clear. However, assume 50% of the award is for punitive damages, emotional distress, etc, and the balance is recovery of expenses for pain and suffering, etc. That $500 thousand is taxable and most probably at 35% or about $175 thousand.

Wait a minute - what about the $400 thousand that I paid the attorney, shouldn't the taxable amount be reduced by that? No, because miscellaneous itemized deductions are no longer allowed.

So, to recap, you received $1 million; you paid your attorney $400 thousand and you paid $175 thousand in income tax. Your net share of the total settlement is about $425 thousand - just slightly more than what your attorney earned.