WASHINGTON – The Internal Revenue Service says oil spill victims who receive BP payments for lost wages will have to pay up come tax time.
IRS wants taxes from BP payments for lost wages
Under current law, BP payments for lost wages are taxable — just like the wages would have been, the IRS said in tax guidance issued Friday. Payments for physical injuries or property loss, however, are generally tax free. Payments for emotional distress? Taxable, though medical expenses related to the emotional distress are deductible.
Some will be prepared, but I am guessing that at least 24% of them won't (wasn't that the percentage of people who think that government has all the money they need?).
Answer by QuinnMae at 5:47 PM on Jun. 25, 2010
Answer by CAGirl4 at 4:42 PM on Jun. 25, 2010
Answer by wildflowers25 at 4:51 PM on Jun. 25, 2010
Answer by MunchMunch at 5:01 PM on Jun. 25, 2010