- I received a settlement from an insurance company for a car accident. Must I claim the settlement on my taxes
- How much money should I ask for from the Insurance company for a settlement from an automobile accident ?
- Will money from an insurance settlement affect a spouse’s SSI Benefits?
- How do I claim my settlement money from bankruptcy case?
do I have to claim and insurance settlement from a lawsuit on my tax returns.?
08
Mar
Michelle
March 8, 2010 at 2:08 am
I believe so. I think it will be considered income or something along those lines. Put it this way, if in January/February 2008 you receive tax forms from the settlement (providing you received it this year), then more than like you will need to claim it on your taxes. If not, don’t worry – the IRS will soon be calling for you.
bill g
March 8, 2010 at 2:34 am
In my case the answer was no but I would check with a CPA before doing anything.
Glenn S
March 8, 2010 at 2:59 am
Under Section 104 of the Internal Revenue Code – you don’t have to report income related to: (1) amounts received under workmen’s compensation acts as compensation for personal injuries or sickness; (2) the amount of damages received on account of personal physical injuries or physical sickness.
I would not just report what is reported on any IRS forms. If the amount you got is substantial I would consult a good CPA.
Houyhnhnm
March 8, 2010 at 3:20 am
I assume the lawsuit was about making them pay you benefits due. Insurance benefits are not taxable (except for investment returns as in whole-life insurance). If you collected damages for court costs or other losses, including pain and suffering, those aren’t taxable either. If you won punitive damages in your lawsuit, then those would be taxable.