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    sad_dad's Avatar
    sad_dad Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Dec 29, 2011, 05:57 PM
    Paying taxes
    My 12 year old son was hit and killed by a motorist. We received a settlement from the accident. Do I have to pay taxes on the money received?
    JudyKayTee's Avatar
    JudyKayTee Posts: 46,503, Reputation: 4600
    Uber Member
    		  
    #2

    Dec 29, 2011, 06:43 PM
    Your Attorney should have advised you. Was the settlement for your loss, his pain and suffering, something else?
    sad_dad's Avatar
    sad_dad Posts: 2, Reputation: 1
    New Member
    		  
    #3

    Dec 30, 2011, 11:14 AM
    The loss of my son.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #4

    Dec 30, 2011, 08:28 PM
    Sorry for your loss.
    This is from IRS publication 4345:
    "If you receive a settlement for physical injuries or physical sickness and did not take an itemized deduction for medical expenses related to this injury in prior years, the full amount is non-taxable and generally does not need to be reported on your income tax return.
    BUT
    • If you receive a settlement for physical injuries or physical sickness and did deduct medical expenses related to the injury, the tax benefit amount is taxable and should be reported as “Other Income” on line 21 of Form 1040."
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #5

    Dec 31, 2011, 03:34 PM
    BOTTOM LINE: You WILL have to pay taxes on the settlement.

    How much are we talking about?
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