How can I avoid taxes on employment discrimination lawsuit? 4 Answers as of August 22, 2011

I am thinking of settling an employment discrimination suit but want to avoid paying as much tax as possible otherwise I could end up owing more than I was awarded after attorney fees, taxes and other expenses plus I'm losing my EIC this year if I do settle because income will be too high to qualify. I'd like to pay my mortgage company directly from winnings if it's possible to avoid taxes that way as well. Thanks.

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Steven J. Fromm
Steven J. Fromm | Steven J. Fromm & Associates, P.C.
You cannot avoid income taxes on employment discrimination recoveries.
Answer Applies to: Pennsylvania
Replied: 8/22/2011
David Hoines Law
David Hoines Law | David Hoines
this requires more planning than I can give youyou need to sit with a tax attorney or CPA
Answer Applies to: Florida
Replied: 8/13/2011
Mankus & Marchan, LTD
Mankus & Marchan, LTD | Tony Mankus
Any awards from an employment discrimination suit are income to you and you have to pay income taxes on the award. The employer should issue you and the IRS a Form 1099 reporting the award.
Answer Applies to: Illinois
Replied: 8/10/2011
The Schreiber Law Firm
The Schreiber Law Firm | Jeffrey D. Schreiber
Only if the damages are compensation for physical injury or illness or attorneys fees paid to obtain the settlement.
Answer Applies to: California
Replied: 8/9/2011
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