answersLogoWhite

0

IRS regulations can be very complicated, these type cases usually need to be addressed on an individual basis. In general if the monies replace taxable income then the entire amount is subject to taxation. If it is a personal injury award taxes could be owed on a portion or the entire amount depending on the circumstances. The best and safest option would be to consult a CPA or attorney who is versed in tax codes * Interestingly, I have been doing a lot of research on the rules for this, especially how to report and if or what portion is to be withheld), for some employers. Certainly, any specific type of payment can get involved with many things (especially payments as part of pensions, or early returements, etc.). However, if I can make a broad but yet almost always true generalization: If the payment is from a current or EX employer, to a current of EX employee, the IRS requires it to be reported by a W-2 (for FICA purposes if nothing else), or 1099, with proper identification as to type. Following that as the recepient should give you the right result.

User Avatar

Wiki User

17y ago

What else can I help you with?

Continue Learning about Accounting
Related Questions

Do you have to pay taxes on a discrimination settlement with your employer?

Yes, typically discrimination settlements with employers are considered taxable income by the IRS. It's always best to consult with a tax professional for advice on how to handle the tax implications of the settlement.


Do you pay taxes on employer 401k contributions?

No, you do not pay taxes on employer 401k contributions until you withdraw the money from the account.


Can an employer change your withholding without knowledge?

It is not recommended. If you W2 form is lost the employer can change your withholding to single with no deductions. The employee should be notified so an adjustment can be made. An employer that knows that an error is made may have to change something. For example if an employee claims that last year he did not make enough to pay taxes and predicts that this year he will not have to pay taxes and starts making enough that he WILL have to pay taxes then the employer must start withholding taxes.


Do you pay taxes on the settlement of an insurance claim?

You do not generally have to pay taxes on an insurance settlement claim. You can check with your tax firm or accountant for the rules specific to your state.


Do you pay taxes on a business insurance settlement from a fire?

No


Do you have to pay taxes on a health insurance policy settlement?

No.


Why would you want your employer to take out FICA and medicare taxes?

It's not an option for him, by law, your employer MUST withhold these taxes from your pay.


Does your employer pay FICA taxes?

Yes. The way it works in most cases is that you pay FICA taxes in the amount of 6.2% of your gross income and your employer also pays the same amount. Also you are required to pay 1.45% of your gross income for Medicare tax and your employer also matches that amount. So in total you are paying for half of these two taxes and your employer pays for half of the total taxes for these two taxes.


Received check from your former employer do you have to pay taxes?

yes


Do you have to pay taxes on a personal injury settlement from a auto accident?

Generally speaking you do not have to pay taxes on personal injury settlements. However, in certain situations where (1) all or part of the proceeds of the settlement is treated as disability income, and (2) the premium of the policy (under which the proceeds were paid) was paid by an employer; then that part of the proceeds will be treated as a taxable ordinary income.


Do you have to pay taxes for sexual assault settlement?

totally babes!


Do you pay taxes on auto insurance settlement for bodily injury?

No. This type of settlement is not generally taxable.