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Legal Settlement Reporting Requirements: When to Issue a 1099

February 5, 2025

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Q. We paid a settlement to a parent of a student and in this settlement we reimbursed receipted expenses along with their attorney fees. Do I 1099 this type of legal settlement? A. (Answered by IOFM's third-party tax advisor) Is the settlement itself taxable? If it is taxable, then the attorney fees would be included in the settlement amount, along with the reimbursed expenses. Look at the settlement document to see how the settlement is specified. See pages 106-116 of the Form 1099 Master…

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