snip 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. Good point and also you could claim the following but check with your acct and or atty As the income was earned from credit repair. You could clain 1. Your isp bills 2. Postage,stationary,pens etc 3. Mileage or bus fare to post office. 4. Phone calls to atty or help centers 5. Atty and or acct fees 6. If you use credit repair folks, their bills 7. Maybe even the cost of the computer system if you havee 2 PC at home and declare 1 system to be used only for credit repair. Maybe rave on about this system need shigh security due to data etc Did I miss anything
I am not sure what you mean by expense, but any amount actually received by the defendant or his insurance money is considered taxable income. Of course, you would deduct attorney's fees and litigation expenses from that amount (I would think)
I am not sure what you mean by expense, but any amount actually received by the defendant or his insurance money is considered taxable income. rocket1977 ====================== 1*Every thing you spent on the damages. LB 59
It does not work that way. In your scenario, your loss is $5,000.00 for the car. If you have $12,000 in losses (car and medicals), and you settle for $50,000 my understanding is your "income" is $38,000.00 as a result of that accident. The IRS did not chose to buy a more expensive car, you did. Thats how they would look at it.
It's worse than you think. Legal expenses are deductible only to the extent that they are related to the production or collection of taxable income. Even then, such fees are deductible only to the extent that it in combination with other misc. deductions exceeds 2% of your adjusted gross income. Legal fees incurred to get your car fixed because an irresponsible driver ran into it are not deductible unless the car is used in business, and then only to the extent the car is used in business. The first thing you learn in a course on income taxation is that fairness in the tax code is a principle, and not necessarily a practice.
