I just settled an auto accident case this month-I received money from the company(DHL) that hit me running me off the road. Do I have to pay taxes on any of the money and how do I tell what I should have to pay? I know nothing about this stuff...
2007-02-01 16:37:51 · 7 answers · asked by xitalaux84 1 in Business & Finance ➔ Taxes ➔ Other - Taxes
No, the settlement is not taxable. The settlement is a reimbursement of your losses, and is not considered income. Also, if you were claiming the accident for deducting a casualty loss, you would need to reduce your loss by the amount you received as a settlement.
Now, if the settlement was an award to you as a result of a lawsuit, it may be partially taxable. With lawsuit awards, only the compensatory damages is nontaxable. Any punitive damages you receive would be considered taxable income to you.
2007-02-01 16:54:59 · answer #1 · answered by jseah114 6 · 1⤊ 0⤋
Hi. I'm sorry to hear about your accident. Hope your doing well. But first to answer your question...the answer is NO. I too was in a car accident on my 16th Birthday and also recieved a settlement(5yrs later) from the insurance comp of the comp truck that hit me and I didnt have to pay taxes on it. You're in the clear..don't worry..lol. P.S. If you need help spending your $....I would be more than happy to help! lol.
2007-02-01 16:46:16 · answer #2 · answered by shaylea29 3 · 2⤊ 0⤋
Yes, the government makes you pay taxes on any money recieved in a settlement... it is considered Income... but if you just got it in 2007 then you don't have to worry about it until next year.
2007-02-01 16:44:50 · answer #3 · answered by Anonymous · 0⤊ 1⤋
From my experience I have always been told from my Lawyer that you do not have to pay any taxes on a settlement such as this.
2007-02-01 16:44:35 · answer #4 · answered by Hopeful 4 · 1⤊ 1⤋
1) Yes.
2) Hire an accountant.
2007-02-01 16:44:31 · answer #5 · answered by Anonymous · 0⤊ 1⤋
If you just recieved it this yr...then you don't pay tax on it till next yr and yes you will have to pay tax. It's considered income.
2007-02-01 16:41:50 · answer #6 · answered by Chrys 7 · 0⤊ 2⤋
do you have a CPA
2007-02-01 16:44:50 · answer #7 · answered by yessy yes no 3 · 0⤊ 0⤋