Q: I was abused by a priest when I was a teenager. I told the diocese and they are paying me money. I don’t want to pay
Federal tax on the money. How do they write it so I don’t pay taxes?
A: You need to consult a CPA or tax attorney. In general, compensation for physical injury is non-taxable, but compensation for emotional distress is taxable. To avoid tax liability, I'm guessing that the documentation must make clear that it's for physical injury. Search for a professional in your geographic area.
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