Client received compensatory damages award from his previous employer who fired him. He spent that money on attorneys and medical bills? Tax Consequences?

[chapguy19]

And how do I enter all this in ProSeries?
Client received a 1099-MISC for the award, Box 3 Other Income. 
Where do I enter the expenses?
I am assuming that I check "Other Income" in Box 3.
His award is greater than his expenses.  Does he pay taxes on the excess?

[Terry53029]

unless the damages were for physical  injuries he pays tax. Only employment claims, civil rights claims, and some types of whistleblower claims qualify for the above-the-line deduction for expenses which are put on schedule 1 part 2

[chapguy19]

Can he deduct his legal fees and medical costs?

If so, where do I put them?

Medical on Schedule A?

What about legal?

Thanks, Christopher

[BobKamman]

IRS Pub 4345 is a good place to start:

https://www.irs.gov/pub/irs-pdf/p4345.pdf

For attorney fees, see Pub 529 I(page 11)

https://www.irs.gov/pub/irs-pdf/p529.pdf 

[qbteachmt]

"Does he pay taxes on the excess?"

What does "compensatory" mean? Punitive? Physical Injury? Back pay? Pain and suffering? Emotional distress? Unlawful discrimination on the job? Separated amounts for more than one reason?

Because you need to determine if the settlement is taxable separately from the status of legal fees as redefined in TCJA.

Have you read any of the IRS resources, such as:

https://www.irs.gov/government-entities/tax-implications-of-settlements-and-judgments

https://www.irs.gov/pub/irs-pdf/p4345.pdf

[Terry53029]

1. As others have said you need to research yourself as only you know details. As far as medical, expense's are not expense's involved in lawsuit, and if threshold's are met would be deductible on schedule a if your client itemizes. Only a few lawsuits not involving physical injury qualify for above the line deduction for court cost, legal fees, fees directly related to bringing lawsuit only, and not what your client spent the funds on.