This a kinda stupid question I guess, but not sure about it.
I was in a wreck last year and was not at fault. I paid the $500 insurance deductible out-of-pocket to pick up my car from the body shop. I have yet to receive this money from my insurance company. Question: When I do receive this money will I have to claim it as income at tax time because we are in a different calendar year? Does it matter that I paid it out-of-pocket, therefore, IMO, it isn't really income?
2007-06-19 03:53:59 · 5 answers · asked by ModelFlyerChick 6 in Business & Finance ➔ Taxes ➔ United States
The settlement for the insurance claim is not income. It only makes you whole again.
If you took a casualty deduction in the year of the wreck, then you would have to claim the settlement as income. Since you don't get a 100% deduction for casualty losses, that would not be a smart way to proceed.
2007-06-19 05:04:42 · answer #1 · answered by Bostonian In MO 7 · 2⤊ 1⤋
1
2016-09-25 19:04:20 · answer #2 · answered by ? 3 · 0⤊ 0⤋
You won't receive the deductible amount from your insurance company at all. The deductible is money that you have to pay no matter whom is at fault in an accident. Any other money you may receive is not considered income to you at tax time regardless of when you receive it.
2007-06-19 03:59:32 · answer #3 · answered by Kat 2 · 2⤊ 0⤋
It is not income. It is payment for damages caused by someone else. You did not profit from it. The payment just returns you to the previous state you were in prior to the loss.
2007-06-19 03:58:05 · answer #4 · answered by PJ 5 · 1⤊ 1⤋
No, what you get will be reimbursement, and won't be taxable.
2007-06-19 04:20:46 · answer #5 · answered by Judy 7 · 1⤊ 1⤋