My employer did not give employees a lunch in the 8 hr work day. The state requires all employees to have a 30 min break/lunch after 5 hrs of work. There was a lawsuit against my employer and they are back paying each employee as part of the settlement. Will I or should I be taxed on this check I will receive? If it is taxable, any ways to reduce the tax?
2007-11-14 01:03:06 · 2 answers · asked by Jon G 2 in Business & Finance ➔ Taxes ➔ United States
Yes you are taxable on that and no there really isn't any way to reduce your taxes on it unless you max out your dependants.
2007-11-14 01:09:38 · answer #1 · answered by Tom C 3 · 0⤊ 2⤋
That settlement is fully taxable. There is no way to reduce the tax. Ignore the suggestion to 'max out' your withholding allowances. That might reduce how much tax is withheld, but you will STILL have to pay the tax when you file. If you have underpaid by more than $1,000 there may be penalties and interest for underpayment of estimated taxes.
2007-11-14 10:34:42 · answer #2 · answered by Bostonian In MO 7 · 1⤊ 0⤋