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Taxtom, Accountant
Category: Finance
Satisfied Customers: 2364
Experience:  25 Years in preparing Personal and Business Tax Retuns
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In January 2011, I received a settlement award in a class action

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In January 2011, I received a settlement award in a class action lawsuit. The gross amount of the award was $18,153 of which $1265 in taxes were withheld from $3289 allocated as "Wages" (W-2 to be issued). The rest of the award, $14,863, was allocated as non-wage income & interest (1099 MISC to be issued). So my net award (the check I received) was for $16,888.

Before deductions, what will my income be in regards XXXXX XXXXX award on my tax return?

Is the $3289 of my gross "Wages" portion of the award included even though $1265 in taxes were withheld? Or is the $2024 net "Wages" included in my income -- the remaining amount AFTER taxes witheld?

Taxtom :

Hello, The total of award $18,153 will be reported as other income in the amount of $14,863 and wages of $3,289 on your return. You will record the $1265 in taxes paid the same as all other W2's. Since the revenue wasn't paid until 2011 you would report this in 2012 on your 2011 return. Thanks Tom

Customer: replied 6 years ago.
Thanks Tom. In regards XXXXX XXXXX 2010 tax return I'm wondering if it's okay to get an extension until October. After a standard deduction of $5700 I will only have a net income of around $1500. There would be no taxes due on that amount if I'm correct. In that case there wouldn't be a penalty with the IRS?

On $1500, how much would I have to pay in Social Security, Medicare, etc.

Also, are my Social Security disability payments ($666 a month or $7992 annually) exempt from taxes?
Hello, Unless you are planning to file for a refund there is no reason to file the extension. You must make $25,000 before your social security is taxable. Thanks Tom
Customer: replied 6 years ago.
Sorry Tom, but you didn't answer one of my questions. How much social security and medicare would I have to pay if my net income is $1500? Would I be penalized if I filed with an extension (it's more convenient for me then filing before April.)

I will ACCEPT as soon as you reply.
Hello, You have no taxable income. In addition to your standard deduction you have personal exemption of $3650 so you have no taxable income. You do not have to file. Thanks Tom
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