I am hearing from an attorney who has spent more time studying his 1099 than I have that the amount being reported is the gross amount of the attorney fee before deduction of the user fee. Was that intended?
Update: I have had a chance to review my own 1099 and list of cases and can confirm that the user fee was included as if paid to me. One person has suggested that this is just like W-2s and all attorneys have to do is to post the user fee as a deduction on our income tax forms. That is not as easy as the poster thinks. Social Security is not sending out a list of user fees paid and it would be almost impossible to keep track of them. My bookkeeper records the bank deposits she makes and those are my firm's gross income. Doing it any other way would be quite cumbersome and unnatural. If Social Security ever figures out a way to report accurate figures on payments of attorney fees, there is going to be trouble.
Update: I have had a chance to review my own 1099 and list of cases and can confirm that the user fee was included as if paid to me. One person has suggested that this is just like W-2s and all attorneys have to do is to post the user fee as a deduction on our income tax forms. That is not as easy as the poster thinks. Social Security is not sending out a list of user fees paid and it would be almost impossible to keep track of them. My bookkeeper records the bank deposits she makes and those are my firm's gross income. Doing it any other way would be quite cumbersome and unnatural. If Social Security ever figures out a way to report accurate figures on payments of attorney fees, there is going to be trouble.
1 comment:
Of course it is the full fee - my W-2 had my full salary, not the net after taxes, insurance, CSRS/FERS, etc., were deducted. Just look at the detail list to see the amount of the user fees that will be used as a business expense deduction.
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