Wednesday, June 10, 2009

taxable income

I have a question for anyone who knows the answer. Last night at work i was talking to a couple of my employees and we were trying to figure out if you need to claim all money and awards you win or are granted in your favor. we found out that with betting, anything under ten thousand you do not have to claim. We also tried to find out about claiming compensations of being awarded money in a law suit. Is there a price limit on what you claim, or is it that since it was awarded by a judge the money is tax free? is there any other money that's considered tax free through the system?
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3 comments:

  1. Chris GontarJune 10, 2009 at 1:56 PM

    Hi Paul,
    Last year my friend won a small amount of money at the casino (under $2000.00) and he had to claim it on his taxes. Also, I think that when you win the lottery and the amount is over $2000.00, you must claim as well. Hope that helps!
    Chris

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  2. Colleen KeeferJune 10, 2009 at 2:44 PM

    I agree with Chris, I was under the impression that all winnings need to be claimed, even the small ones. I would suggest you look in the IRS tax code for that type of income. The specifics should be listed in the book. Start with the instructions for the 1040 and then follows where it may lead. I doubt if anything is tax-free.

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  3. TracyJune 10, 2009 at 6:30 PM

    Awards in personal injury lawsuits are non-taxable. Awards in other lawsuits such as a breach of contract case are considered income and taxable. Always check with an accountant though!

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