Structured fees not only reduce an attorney’s current taxable income, but they also offer a secure way to set aside income for future needs.

An attorney is taxed only as payments are received. Payments are reported on Form 1099 in the year in which the payment is scheduled. By using a structured settlement an attorney can:

1. Spread out legal fees over years, possibly avoiding a higher marginal tax bracket, allowing the money saved by deferring current taxes to be invested with little risk and no management fees. It is important to remember that when structuring a fee, an attorney is investing pre-tax, locking his settlement proceeds into a high-yielding investment.
2. Choose when the payments will start at the time of settlement; there’s no need to wait until age 59 1/2 for payments to begin.
3. Create a low-risk foundation for a diversified portfolio.

This article provides a nationally renowned tax attorney’s take on the special tax advantages available if you structure your attorney fees.

Learn more by following the links below. Then consider how all the advantages of structured fees can be enhanced by the competitive rates and first-class service you get from NSC.