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Tax Issues for Employment Law Claims (and Wrongful Termination Suits)

By John Strohmeyer • Tax

Tax Considerations for Employment Law Claims

You’ve just won a settlement for an employment law claim – great! But now you need to really consider the tax implications of this payout.

 

 

We see a lot of complicated tax issues in our business, and we know how confusing certain types of income and payments can be when it comes to reporting it to the IRS. This is especially true for legal settlements and judgments.

If you’ve won a settlement for an employment law claim or wrongful termination suit – great! But now you need to really consider the tax implications of this payout.

The bad news is, no matter how you slice it, this is considered income by the tax code, so you’re going to be paying normal income tax on this.

This week’s video walks you through the big considerations.

  • Does it matter if you get a 1099 or W-2?
  • How do you report this to the IRS?
  • How do you pay your attorney?
  • How does the money actually get to you?
  • How do you plan for the tax hit?

Tax Issues for Employment Law Claims (and Wrongful Termination Suits)

You've just won a settlement for an employment law claim - great! But now you need to really consider the tax implications of this payout.

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Foreign trusts can get taxpayers into a lot of tax trouble, so I'll walk you through why this approach can get you in hot water with the IRS.

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Schedule a call with Strohmeyer Law to discuss your legal and tax issues.

Need legal help? Contact Strohmeyer Law today.