How do I settle an employment discrimination suit without paying a lot of taxes?
I am thinking of settling an employment discrimination suit but I 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. Is that possible?
Answered By: THE HUBBARD LAW FIRM, P.C.
Essentially, your damages from an employment discrimination claim are in compensation for lost wages unless you are able to characterize them as compensation for personal injury of some sort. As wages, your earnings are subject to income tax. This question should be directed to your attorney who will know more about the nature of your claim and the characterization of the damages you are seeking.
Answer Applies to: Michigan
Replied: 11/27/2011
Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.
Answer Applies to: Michigan
Replied: 11/27/2011
Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.
Answered By: Steven J. Fromm
None of what you want to do is possible. It will be income to you with all the tax implications and complications.
Answer Applies to: Pennsylvania
Replied: 11/23/2011
Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.
Answer Applies to: Pennsylvania
Replied: 11/23/2011
Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.
Answered By: Mankus & Marchan, LTD
Award or settlement from an employment discrimination claim is taxable as income.
Answer Applies to: Illinois
Replied: 11/19/2011
Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.
Answer Applies to: Illinois
Replied: 11/19/2011
Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.
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