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.
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
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
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