Have a Tax Question? Ask a Tax Expert
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No. You shouldn't have to pay taxes on this money a second time.
How much is the check going to be for?
The amount is for $ 50,000.00 What steps do I need to take in order to prevent paying taxes the second time? Is there any forms I will need to fill out for IRS in the event a bank attempts to report this as some type of income?
The bank doesn't do this that of reporting. A couple of things come to mind if you are concerned about cashing that large of a check.
One, & the best way to handle this would be to simply deposit the check in your own bank account & either make withdrawals less than $10,000. at one time; or you might ask your attorney to give you multiple checks for amounts under $10,000. and then you could cash or deposit the checks one at a time.
When your dealing with checks from an attorney's trust account, there's not much to be concerned about; hundreds of thousands of these type of checks are cash every day in the United States.
is not true that once the deposit is made on any amount over $10,000.00 that it is reported to the IRS?
No. Not unless you deposit cash; many, many checks over $10,000. are deposited every day, in fact millions of them; if they had to be reported, the IRS would be buried in paperwork. They wouldn't begin to have the staff to even look at the reports.
In fact many deposits of cash over $10,000. are exempt from reporting; supermarkets, betting from tracks, gambling operations, basically anyone who regularly makes cash deposits in excess of $10,000., do to the nature of their business.
There really isn't cause for concern.