A friend just received a $ settlement for pain & suffering. Is it mandatory to report this to the government?

INCOME TAX

Answer:
No, money awarded in a personal claim doesnt get taxed.
yes the government wants a piece of everything
I suggest you talk to an attorney,I am going to have a lawsuit for 2 million and I wasn't worried about taxes coz I was harmed and injured for life and I don't think they can for a lifetime injury!
He/she will be able to keep 1/3 - 1/4 of it the rest will go into various kinds of taxes.

If this is about the Canadian tax system the Canadian gov't won't take much compared to the American Tax system
The US Government WANTS EVERYTHING you ever get and then they want a little more. So YES or when they find out about it, they will take their share weather you still have it or not. Sorry!
I guess you have to check with your lawyer, but generally settlements are not taxed.
My brother in law recieved a settlement for injuries, and he was not taxed on it. It's not considered an income, so they don't take any of it.
No. Money from legal awards is not considered income, just like collecting on an insurance policy you own.
no money gained whether a settlement or winnings does not have to be declared as these are not earnings, however if the funds are invested and you earned interest on the principal then the interest earned would have to be declared as income.
It has to be reported. As far as paying taxes on it contact the IRS.
No doubt, considering tax authorities are among the biggest criminals on planet Earth and always have been. It is a bunch of liberals doing all they can to STEAL a person's hard-earned money and then trun it over mostly to people who don't work or do much of anything productive.
ABSOLUTELY NOT.
In Canada, this type of income is NOT taxable and does not need to be "reported". Enjoy the money!!
Now if you invest this money, any income earned on the investment -- interest, dividends, or capital gains -- will be taxed at the appropriate rates, but not the principal itself.

The answers post by the user, for information only, BAnswer.com does not guarantee the right.

Other Questions and Answers:
  • official website of delhi sales atx department?
  • What is the rule for a church selling an asset which was bought with disignated donations for that asset?
  • Will I be able to claim child tax credit for 2006 yr?
  • If i get married will it affect my taxes?
  • What is the best way to send money abroad to a Pakistani bank account from within the UK?
  • I had to pay £5000 for private surgery. Is this tax deductable?
  • $40k income, how much tax?
  • Advantage/Disadvantage of buying a house and putting the title on an S Corp?