What would you like to do?

How do you avoid paying taxes after winning a large sum of money from a lawsuit?

already exists.

Would you like to merge this question into it?

already exists as an alternate of this question.

Would you like to make it the primary and merge this question into it?

exists and is an alternate of .

Taxes on Large Winnings What the payment is for will determine its taxability. For example, a payment you receive replacing something you lost, such as a car, your home, jewelry, etc., is generally not taxed. Awards and settlements related to personal injury are not taxed. Also, frequently, many of the costs of the lawsuit may be taken against the result and that can substantially change the tax result. (For example, if the attorney is paid a percentage fee or an hourly fee, and who pays for other expenses, are all directly related to who gets the income and or the right to deduct it). These deductions are miscellaneous itemized on Schedule A, and are reduced by 2% of adjusted gross income. Court awards and settlements for breach of contract, most torts, including punitive damages, are generally taxable with the exception of those relating to personal injury.

You should work with a qualified attorney and tax professional to make sure your settlement is structured to minimize any tax liability. If you have already received an award or settlement, then you should consult a good tax professional to advise you. And of course, tax is paid on your entire financial dealings, not just on this one item. So, depending on many other factors, like losses from other sources, charitable contributions, number of dependents and other deductions, you may not end up paying tax anyway.
Thanks for the feedback!

What percentage of tax do you have to pay on a large lottery win?

Taxes on Large Lottery Winnings   Depending on your other income and the amount of your winnings, your federal tax bracket can go as high as 39.6%. Your lottery winnings

Do you have to pay taxes on a lawsuit you were awarded?

My husband received part of a settlement from a lawsuit. The rst to follow. Does he need to declare the money and pay taxes on it? Have heard both pro and cons concerning this

Do you pay taxes on a lump sum of divorce money?

Most lump sum payments given in a divorce are not taxable. Lump sum  payments that are non-cash property settlements, payments to keep  up a standard of living or property a

Do i have to pay taxes on money you win at a casino?

In the U.S. the general answer is yes, legally you are supposed to pay tax on any casino winnings. That said, you can also deduct losses up to the amount of your winnings. You

Do you have to pay taxes on money received from a civil lawsuit?

  Generally yes...but it is entirely situational. Looked at broadly, if the money received is to evenly replace something of value you lost...say paying you for the brok

Do you pay tax on a winning settlement in a lawsuit?

  This depends on what the settlement consist of. Any part of the settlement that is reimbursement for medical expenses or pain and suffering is not taxable. If part of th

Do you have to pay taxes on settlement from lawsuit?

  It depends on what the lawsuit payment is for. Generally, if it is paying you for the loss of property, no. If it paying you for the loss earnings (or as a penalty to th

What taxes do you pay on large pay lottery winnings?

Depends on where you live. Different states have different taxes. And Canada has different than the states too. I'im pretty shure you just hay whatever that taxes are, like wh

How much money do you pay for taxes on winnings?

Winnings are like any other "ordinary income" (although provable losses are deductible against the winnings). You pay tax at your own personal effective rate, (different for e

Do you pay tax on winning settlement in a lawsuit involving benefits vs lost wages?

Yes. Also if you have had earnings over a period of time the lost wages tax will be secondary ans The way your Q is worded makes exactly what you are asking difficult - but