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<blockquote data-quote="dmac1" data-source="post: 3354981" data-attributes="member: 60252"><p>I started thinking about the ruling. Your award could, maybe should be considered as employment income, reportable on schedule C, since it was an award for back illegal deductions. It was an award for SOMETHING related to work, making it employment income. I think that you could deduct a lot, maybe all of it into some kind of retirement plan like an SEP, and reduce it enough to hopefully owe no taxes. Between the standard deduction and the personal exemption, you can deduct basically $11,000 from the award, plus $6500 for IRA deduction, and only owe on the amount above $17,500. I know my total Social Security is tax free, maybe yours as well. I&#039;d look at how counting the award as income on Schedule C might help or hurt you. If you can also deduct 20% of the award in a SEP, plus whatever for a regular IRA, plus the make-up contribution, it might be worth paying a small amount for FICA taxes.</p></blockquote><p></p>

[QUOTE="dmac1, post: 3354981, member: 60252"] I started thinking about the ruling. Your award could, maybe should be considered as employment income, reportable on schedule C, since it was an award for back illegal deductions. It was an award for SOMETHING related to work, making it employment income. I think that you could deduct a lot, maybe all of it into some kind of retirement plan like an SEP, and reduce it enough to hopefully owe no taxes. Between the standard deduction and the personal exemption, you can deduct basically $11,000 from the award, plus $6500 for IRA deduction, and only owe on the amount above $17,500. I know my total Social Security is tax free, maybe yours as well. I'd look at how counting the award as income on Schedule C might help or hurt you. If you can also deduct 20% of the award in a SEP, plus whatever for a regular IRA, plus the make-up contribution, it might be worth paying a small amount for FICA taxes. [/QUOTE]

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