Fools: I have a client for whom I help with financial matters. In 2005 she filed for disability with Social Security. She received her settlement in 2008. All along the intervening years she received a monthly amount from Aetna with whom she had an insurance policy. This money was declared as income each year.Now when she received this large settlement in 2008 she had to repay about $23,000 to Aetna and had to give $5,300 to her lawyer. In fact the lawyers funds when directly to him.However her box 5 on her SSA-1099 shows about $31,000 which includes the $5,300 for the lawyer plus the amount she had to repay Aetna. Can she deduct these two amounts on her return?Looking back she filed for disability not for herself but for Aetna but she is the one on the hook for the taxes.Any and all information would be greatly appreciated.Fletch52
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