Is a settlement from a class action suit considered as income?

Q) I have been trying to connect with the IRS for 3 days. Question regarding a class action suit, I had a medical implant several years ago.the case was settled and I am to receive a monetary sum of money. Is this considered as income and how do I figure the legal + fees taken out the settlement amount??

A) If you received a monetary settlement from a class action lawsuit, it is generally considered taxable income by the IRS. This means you will need to report the settlement as income on your tax return for the year in which you received it.

To calculate the amount of the settlement that is taxable, you will need to subtract any amounts that are not considered taxable from the total settlement amount. These may include damages for physical injury or illness, and any legal fees or costs that you paid out of the settlement.

It is a good idea to keep good records of the settlement and any related expenses, as you will need to provide this information to the IRS when you file your taxes. You may also want to consult with a tax professional or refer to IRS Publication 525, “Taxable and Nontaxable Income,” for more information on how to report the settlement on your tax return.

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