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medical expenses paid from the personal injury settlement

Level 2

If the attorneys paid the medical bills directly to the providers and gave the taxpayer the net amount can the taxpayer itemize a medical deduction for the difference? (ie $150,000 settlement, $30,000 paid to medical providers, net check to client $120,000 non taxable).  The client did not take prior itemized deductions for injury, the injury & settlement occurred in the same year.

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1 Comment 1
Level 15

No. If the client got the whole $150K it wouldn't be taxable. If he then paid $30K medical it also wouldn't be deductible.

The net $120K is the same thing.