2007-02-02 05:21:49 · 7 answers · asked by xxmilitarychikxx 3 in Politics & Government ➔ Law & Ethics
Yes, you have to pay taxes on everything.
2007-02-02 05:23:56 · answer #1 · answered by mfupipoet 2 · 0⤊ 2⤋
Only If That Settlement Is New Income, Say Your Boss Doesnt Pay You For 6 months but pays your income tax, then you sue him, Then No, Because The Tax Is Paid.
Or If An Insurance company doesn't pay you after your loss, then you take them to court & get the money, then no, because the stuff you lost was already paid for with post tax income.
2007-02-02 05:26:08 · answer #2 · answered by Spaghetti MY 5 · 0⤊ 1⤋
First of all, to the other people that answered this question (incorrectly so far)... You are clown shoes. DO NOT ANSWER A QUESTION YOU DON'T KNOW THE ANSWER TO... how simple is that?
Ok, now, as to paying taxes on settlements... It depends on what the settlement is for. If the settlement is for physical injuries, pain and suffering, or certain other things, you will NOT have to pay taxes. However, if the settlement is designated as being for punitive damages or certain things like that, you WILL have to pay taxes on it.
Your lawyer that is representing you in court should be able to refer you to a tax lawyer or tax accountant that can give you advice on what will have to be included for taxes.
2007-02-02 05:33:18 · answer #3 · answered by tivodan1116 3 · 2⤊ 1⤋
Best to ask an attorney about this one, but in the interim, keep this in mind:
The courts have defined "income" to include all accession to wealth, clearly realized, over which you have dominion. Essentially, that means income is anything of value that you receive to do with as you please, for which you do work or because it is obligated by contract. And, unless it's excluded as income by the Constitution or by statute (like municipal bond interest), it's taxable!
However, one of the most basic tenets of tax practice is that if money received merely returns you to your original starting point, if it just makes you "whole" again, it's not "accession to wealth," and it is not income.
as I said, "IN THE INTERIM" etc., I also suggested that you speak to an attorney on this one. Tax laws change. A REAL lawyer has the answer to your question, once again, as I suggested.. A REAL lawyer. Not a law student.
2007-02-02 05:28:26 · answer #4 · answered by rare2findd 6 · 1⤊ 0⤋
Dear T: Generally NO! If the award is for back wages YES. Pain and suffering awards are not taxed. The state guide lines follow the Federal. Your attorney or judge will show a breakdown on the award. This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent
2016-05-24 05:32:34 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Yes as the other person lists it as a loss.
2007-02-02 05:26:22 · answer #6 · answered by fancyname 6 · 0⤊ 1⤋
Not on disability
2007-02-02 09:25:56 · answer #7 · answered by Anonymous · 0⤊ 0⤋