Hey Cannoda I think LB was trying to pull our chain. He doesn't seriously believe it is income. Gotta love that LB!
Wow! I would never recommend that but I do hate paying excessive taxes! By doing that your taxes will go up by approximately 1/3 of the unpaid balance. Instead I would just insist on a signed agreement from the creditor. Each to their own I guess.
It's not a guess look at the link on the last post I made . thats what the IRS think so I will go with their guess ( grin ) You think bad tradlines are a pain try undeclared income with the IRS.. It would not surprise me that the CA declare the 1099 to the IRS but forget to send you a copy
Sure, the IRS would acually prefer that you just sign your paycheck and drop it off at their nearest office. If there is no 1099 or your agreement specifies no disclosure there is no unreported income. Again I would NEVER under any of the circumstances discussed demand a 1099.
damage settlements taxable cannoda ======================= How can they be considered income to be taxed? LB 59
you must include the canceled amount in your income. oz | ================= This don't sound right because part of it could not be income?
If you are paying $100.oo a month on a $5000.oo loan and default during the 51St. month how much would you owe income tax on if they gave you a 1099 form?
The IRS considers any cancelled debt over $600 as "taxable income." Its a rule of the IRS. I dont know why its considered income, I just know that it is. I had to report a settled debt once.
I though reimbursement for damages was merely a recovery of lost income rather than additional income.
quote: -------------------------------------------------------------------------------- Originally posted by lbrown59 I though reimbursement for damages was merely a recovery of lost income rather than additional income. -------------------------------------------------------------------------- *Yes, but it's income you haven't paid any taxes on. cannoda ================== *Boy now I am lost cornfused and befuddled. How is it income that you never paid taxes on? LB 59
Are there taxes on personal injury settlements? I just recieved a six figure settlement from a drunk driving accident and have been told this is not taxable. When did the rules change? Matt
http://www.s-a-i.com/taxes.html http://www.lexisone.com/news/nlibrary/081902b.html http://www.tax.org/taxa/tadiscus.ns...3e837707aab7e665852564420080e92c?OpenDocument go figure ask you legal eagle who settled the claim And get it in writing I don't know therefore I google
One thing ya gotta keep in mind is that even if you get a 1099 for $860 - it doesn't mean you are paying an additional $860 in taxes. It means that you are paying your tax percentage of the additional "income", so if you're in the 35% bracket (just throwing out a number, I can't remember what the actual percentages are), then you are paying 35% of $860 or $301. Of course, if you can come up with deductions to wipe out the extra income, then you pay no taxes. If your income shows below the poverty line, then you pay zilch. Don't hit the panic button yet!
Let's say that as a result of being slandered you lost your job. Obviously you have lost the income you would have made on that job. But you would not have paid any taxes on paychecks you didn't receive. A damage settlement is intended to make you whole - to reimburse you for the lost income. But if you don't pay taxes on the damage settlement, you would be better off than if you had simply received the paycheck since taxes were deducted from your paycheck. Compensation for physical damages simply put you back in the same position you were prior to the injury. If someone hits your car, you are out the decrease in the value of the car from the accident. But an insurance reimbursement makes you whole. Also, note that the car would have been paid for with income that has already been taxed.
I agree. However, new IRS rules deem personal injury settlements as income. The exception I was thinking about may be damages from a drunk driver. Check with your lawyer. I think that rule changed this tax year.
However, new IRS rules deem personal injury settlements as income rocket1977 ============================ But wouldn't the expenses of the personal injury be a tax deduction? LB 59
However, new IRS rules deem personal injury settlements as income rocket1977 ============================ But wouldn't the expenses of the personal injury be a tax deduction? LB 59
However, new IRS rules deem personal injury settlements as income rocket1977 ============================ But wouldn't the expenses of the personal injury be a tax deduction? LB 59
