QUESTION
How are the taxes for an award from a class action lawsuit from years ago be taken cared of?
Asked on Mar 10th, 2014 on Taxation - California
More details to this question:
I received notice that I was included in a class action lawsuit. Apparently the award will be over $10,000 from a previous employer back from around 1997-2000. Will taxes be taken out prior to payment being issued or will I have to make the tax payment on my own? How would you re-do your tax's from back to that time, do I need to re-file?
1 ANSWER
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If the money is being paid in 2014, it will be taxable in 2014. No need to open old returns. If taxes are not withheld, you would be wise to set aside a reasonable portion in a CD so that you'll have plenty of money when April rolls around.
Answered on Mar 11th, 2014 at 10:56 AM