Taxes are not usually put into the equation of personal injury settlements. The majority of any settlement will not be subject to taxation. Small things such as punitive fees and accrued interest on the settlement can be taxed, however.
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Doesn't change any of your legal obligations (other than the debts at the court), like filing taxes, or what is due.
No bankruptcy will not protect you from wage garnishments for certain types of debt. For example, court ordered child support/past due child support, court ordered alimony/past due alimony,student loans, federal taxes,state taxes and county taxes are not covered under the protections of bankruptcy. Bankruptcy will also not protect you from wage garnisments for court ordered fines,restitution.
Typically you do not have to pay taxes on personal injury settlments. Adding taxes into the equation of a specific settlement amount would be too difficult. For instnace, if an injured person is given a settlement for medical bills that comes out too little after taxes, it would have to be re-worked. Only smaller things can be taxed after a court case such as punitive fees assigned by the court or accrued interest. The law article below goes into more details regarding taxes and PI settlements.
You are legally required to pay taxes. Taxes are only due on money you have earned therefore if you owe taxes you have had the money. If you do not pay the taxes you owe you will be sent to court and made to pay - even if you go to prison you will still owe the tax man.
No. You do not inherit taxes due on anything. Still, if taxes are due on one piece of property and there is money in a bank account elsewhere, the money in the bank account might go to pay the taxes rather than go to the heirs. That is one purpose of Probate Court. Claims against the estate are settled in Probate Court. The heirs get whatever is left over. If someone dies owing more than they are worth, you can not get stuck with the bill unless you cosigned a loan or are a joint owner or something like that.
Federal Form 1040 is due April 15, 2010.Other types of taxes such as corporate taxes, estimated taxes, local taxes, property taxes, employments taxes, excise taxes all have their own due dates.
Federal income taxes are due April 15 of the following year.Most state income taxes are due the same day, but check with your state.Other taxes such as property taxes, estimated taxes, sales taxes, etc. each have their own due date.
Out of Court Settlement
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No it is not necessary to file for an extension when no taxes are due or you would be due a refund.
In most cases, you will not have to pay taxes on the main portion of lawsuit settlements. The idea is that it would be too confusing if the monetary number to be awarded would end up being less than-say-the value of the medical bills. However, additional funds such as punitive fees assigned by the court and interest accrued on compensations may be taxed. The attached law article explains taxing and lawsuit settlements in more detail.