Did you know that some payouts regarding car and home insurance may not even be taxable? We encourage you to view these payouts in a different light rather than free money. It is in your best interests to view these payouts as being reimbursed for damaged property rather than prize money won from a bad situation. There are differences in what received money from certain insurance payments can be taxed and what money cannot. If you have received a large payout you should go and seek help from someone with experience with tax law concerning payouts to make sure you don’t make unnecessary and possibly costly mistakes.
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Taxes and Insurance : Uncle Sam May Not Be Entitled to Part of Your Payout