Are Structured Settlement Payments Income?
John Darer • October 5, 2018
Do You Have to Report Structured Settlement Payments?
Structured settlement payments are income
, however structured settlement payments are exempt income,
if they represent payment of damages for personal physical injury, physical sickness, wrongful death or workers' compensation, and wrongful imprisonment [ see Internal Revenue Code of 1986, as Amended Sections 104(a)(1), 104(a)(2), 139F and 130].
Structured settlement payments you receive during the year under the above circumstances, are not reportable
on your tax return according to two CPAs I asked.
Here's what the IRS says:
If you
receive a settlement
for personal physical injuries or physical sickness and did not take an
itemized deduction for medical expenses related to the injury or
sickness in prior years, the full amount is non- taxable
. Do
not include the settlement
proceeds in your income.
Where structured settlement are used to pay for taxable damages or for structured attorney fees, payments are generally considered income and reportable in the year received.
Always speak to your CPA about your personal tax situation.
An annuity and a structured settlement walked into a bar, how do you tell them apart? 4structures' John Darer reviews the differences for you right here.
A lifetime structured settlement annuity turns part of your settlement recovery into guaranteed income you can’t outlive that is contractually guaranteed by a regulated life insurance company. A lifetime annuity is sometimes referred to as longevity insurance.
Structured settlement annuities can be very helpful to the budgeting process by providing guaranteed income streams and deferred lump sum payments tailored to specific budget needs and time frames identified in the settlement planning process.
Structured settlement receivables are often deceptfully marketed to investors as annuities. When the originating structured settlement factoring company buys structured settlement payments in a structured settlement factoring transaction, they are buying a receivable not an annuity.
Avoid constructive receipt if a structured settllement or structured attorney fee is to be established. Care must be taken to avoid constructive receipt.
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How would you like to have a "job" that provides you options of guaranteed income for life without being fired, guaranteed raises and no income taxes? If you're eligible, there are ALOT of openings. Find out if you're eligible.
In the structured settlement annuity industry, dominated by many of the largest life insurers in the United States, Independent Life Insurance Company (ILIC) achieved significant milestones in 2024. Good news, positives and some concerns discussed in this lattest post.
Prudential and Pacific Life have once again been named among the world's most ethical companies. Prudential received the award for the 11th time., Pacific Life received the award for the 8th time. Prudential and Pacific Life are leading issuers of structured settlement annuities.
