We are hopefully near the end of a civil suit-IF we are awarded,(being that being right doesn't let you win) I am wondering how the tax laws work-does it depend on the type of award-ie;damages,emotion stress etc. and how is the money dispursed? Does it go to the law firm where they take their cut and then to us? Do we pay taxes on all and then have to pay the lawyers? Can we write off their amount or does it stay separate and they are taxed? Its so hard to find this on the net-I've tried to be reasonable and search but its like looking for chicken and stars in the Campbell soups! Thank you very much in advance!
PS-if anyone had any referring websites too-wonderful! Its been a stressful and long year and a little knowledge could help alot-Our lawyer is a poker face type and acts afronted if we bager him too much.
2007-07-31 05:39:02 · 1 answers · asked by ARTmom 7 in Politics & Government ➔ Law & Ethics
You do not pay taxes on settlements. It is presumed that you suffered damages. A settlement generally goes into a trust account which disburses the attorneys fees and other costs, and of course to the plaintiff.
2007-07-31 05:48:38 · answer #1 · answered by Anonymous · 1⤊ 0⤋