So, your 2010 has come to an end. You have several 'Big' societal concerns strike this year. First, I caught that due to when the montrous earthquake struck Haiti in January 2010, if I itemized contributions made in the relief efforts, I could claim those itemized contributions in 2009 or 2010.
IRS says because the Haiti quake struck so soon after the IRS had mailed its 2010 filing instructions, I could itemize my contributions made to the aid efforts in 2009 or 2010, whichever gave the better tax liability advantage. I chose 2009, as my Black farmers check has just been received after10 years of fighting the U.S. Department of Agriculture in the Pigford II settlement.
And now, the BP Gulf oil spill check in the amount of 25,000 dollars has been received, and I do not know what I have to tell IRS.
This is a question posed to me and members of the crew that usually is along with me of the Cooper and Associates Tax Services 'Mobile Team' (cooperdothan@aol.com). It is becoming a regular one now that BP is finally 'settlig' with those 'victims' of the Gulf Coast Oil Disaster. And we are consulting with the IRS for the ramifications of these payments and or what tax treatment they should receive of IRS. There is not much information that is being disseminated widely, with the IRS staff.Four placements on hold and transfer taught me that.
But very briefly, here is what I learned after spending time in Mobile and surrounding areas about the BP payments. First, the IRS has established a telephone line dewdicated solely, to answering quetions injured Americans of the spill may have. That number is 866-562-5227. Payments made to replace lost wages or dissolution of a business profits are taxable income. As we understand presently, the income is not subject to Social Security Taxes withholding or Medicare tax .
Awards by BP to compensate for for property damage or replacement are not taxable. However, the cost basis for replacement should be kept in mind. Finally, awards for injuries or death (directly related to ) are not subject to income tax. See.IRS.gov/bpoilspillclaims. As more and more cases come to light, we will strive to keep everyone of interst apprised of how members of will be impacted throughtout the tax-filing season.
