your lawyer has worked hard for you and you win a large settlement and you're feeling pretty good. But before you pop the cork on that champagne, you better get familiar with tax law, and particularly the Alternative Minimum Tax Law.
The Alternative Minimum Tax Act in 1969 to prevent people with high incomes and businesses from using deductions to avoid taxes. While originally aimed at individuals and businesses earn more than millions of dollars per year, the tax is always more with their effect on the much less earn as little as a hundred thousand per year. Disallows The tax exemptions, including state and local taxes and deductions, such as attorney's fees. This means that if you win one million U.S. dollars and your payroll
href = "" http://www.bfslaw.com/firm-overview.html ""> lawyer fees of three hundred thousand dollars, you owe taxes on the entire million. In the tax burden on your state and local taxes and the fact that you may for an entire settlement, even if only a portion of the settlement (because someone else with a part), this means that in some cases, you can responsibility for more money than you receive.
The U.S. Congress has a picture of the gross injustices, from the Alternative Minimum Tax law and both parties support grows to jettison the Constitution. In the meantime, if you decide to try a case that should be in the situation of payment of these tax, check with a good accountant, before you start. You could get a hellish headaches, if the tax bill comes through.
Aldene Fred Burg is a freelance writer living in southwestern New Hampshire. She has numerous articles for local and regional newspapers and a number of Internet websites, including tips and topics.
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