As is the case with many other sources of income, attorneys’ fees are subject to federal and state income taxes as well as employment taxes. Therefore, when an attorney receives his or her contingency fee from a client’s personal injury settlement or judgment, a substantial amount of that revenue can be taken by taxation.
This is where attorney fee structures come into play and make a significant difference. The structuring of attorneys’ fees was legally validated by the U.S. Court of Appeals for the Eleventh Circuit in a ruling made in 1996. Since that point, the knowledgeable settlement consultants at Quest Settlements have helped attorneys throughout Los Angeles County and San Diego County to successfully structure their contingency fee payments in order to defer income and associated taxation.