CHARLOTTE, N.C. — There are several big legal settlement cases in the US. Anyone who used Facebook in the last 16 years can get a piece of a $725 Million settlement, and some Turbo Tax users who made $64,000 or less for the 2016 to 2018 tax season can also get their share of a $141 Million settlement. So if you get a piece of the pie, do you have to pay taxes on that payment?
THE QUESTION:
Do you need to pay taxes on any settlement money you collect, for example, from the Facebook Lawsuit?
OUR SOURCE:
THE ANSWER:
Yes, you need to pay taxes on any money you might receive, for example, from the Facebook settlement.
WHAT WE FOUND:
"The simple rule is this if you have income, any type of income winnings awards, found money, that is generally taxable," Steber said.
That includes settlements like Turbo Tax and Facebook. Steeber tells WCNC Charlotte you still have to pay taxes on any amount you receive. There are some exceptions; however, according to the IRS, you don't have to pay taxes on lawsuit settlements relating to physical injury or illness.
There's also no set amount on what is taxable and what isn't, as long as it's considered income, Steber said, that it is taxable.
"A lot of people think that if it's not over 600 dollars or if they don't get 1099, it's not taxable. That is wrong, totally not correct," Steber said.
However, if you do receive less than a dollar from these settlements, the IRS most likely won't come after you for not paying.
If it's under a dollar, we generally don't include it. However, that's not an included rule in the IRS." Steber said.
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Contact Meghan Bragg at mbragg@wcnc.com and follow her on Facebook, Twitter and Instagram.
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