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Do You Have to Pay Taxes on Out-of-Court Settlements?

March 8th, 2021

Posted By

Joseph R. Viola

Thousands of lawsuits settle out of court every year. These settlement agreements cover everything from slip and fall injuries to employment disputes. Figuring out whether you have to pay taxes on lawsuit settlements isn’t easy, or automatic. Here… Read More

Categories: Tax Exemptions

Tags: For Referring Attorneys

Tax FAQ & Info

Can I use a "hardship" exception to avoid tax and penalties on a withdrawal from my 401(k)?

It may depend on the wording of your 401(k) plan, which may or may not permit hardship distributions and may limit the categories of hardship that qualify. The IRS, in addition, has its own criteria for determining "hardship." For a distribution from a 401(k) plan to be "on account of hardship," there must be an immediate and heavy financial need and the amount distributed must be limited to th…

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Do You Have to Pay Taxes on Out-of-Court Settlements?

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