I am receiving a final settlement check from a company due to a vechicle accident. Do I have to claim this on my taxes?
2006-12-20 06:26:45 · 5 answers · asked by BRENDA E 1 in Business & Finance ➔ Taxes ➔ United States
only if the settlement was in excess of the cost of repairs or medical bills.
2006-12-20 06:30:55 · answer #1 · answered by Kutekymmee 6 · 0⤊ 0⤋
The answer, like most tax related questions, depends on a number of factors such as: Was this your private vehicle and was it never used for business (tax write-off purposes)? What was the settlement based upon: was any part of it alloted to "pain and suffering"? A clear and proper answer cannot be given without more information. You need to talk to a professional.
2006-12-20 06:56:22 · answer #2 · answered by Great Tax Info 2 · 0⤊ 0⤋
Most insurers will pay the settlement "net of tax" which means they are treating it as personal injury opposed to lost income. They do this because it helps them settle accident claims more cheaply.
You do not have to pay income tax on personal injury settlements but you do have to pay tax on lost income settlements. Just call the adjuster who is settling this claim and ask him if this is net of tax. If he says yes you are home free.
2006-12-22 00:28:06 · answer #3 · answered by woodluvto 2 · 0⤊ 0⤋
If your father's property is tremendous sufficient that property taxes have to be paid (>$two million), then I could cough up the $3K to allow the legal professional handle it. But sure, the cost could be side of the property and handled no in a different way than the relaxation of his resources.
2016-09-03 14:59:45 · answer #4 · answered by ? 4 · 0⤊ 0⤋
no you dont have to pay tax on the settlement
2006-12-20 22:58:42 · answer #5 · answered by tma 6 · 0⤊ 1⤋