by Structured Settlement Watchdog®
Members of the National Association of Settlement Purchasers who buy paid content from SEO people with no expertise in structured settlements deserve to be called out for a non sequitur like this from Ivan Dimitrijevic (the "silly bit" is highlighted in yellow):
"If you receive a structured settlement instead of cash, you will get payments for either a fixed period of time or your lifetime, which is up to you, and each of those payments will be completely tax-free. Therefore, your after-tax earnings will successfully convert into a tax-free return."
Whether by lack of knowledge or being distracted by the bathing suit picture of perky twerky Miley Cyrus on his Google Plus, Ivan is doing the settlement purchaser or American consumer, no service with the misinformation. Moreover Dimitrijevic completely misleads Americans with the title and his work is not "everything you need to know about structured settlement payments'. because it isn't everything you need to know.
Here are the facts:
- Structured settlement payments that are for payment of damages on account of personal physical injury, physical sickness, workers compensation, wrongful death are income tax-free (see IRC 104(a)(1) and 104(a)(2) and IRC 130)
- These represent the overwhelming majority of structured settlement payments.
- The structured settlement payments as described in #1, are income tax free. There are no income taxes and therefore no "conversion of after tax earnings into a tax-free return". Thus the highlighted statement made by Dimitrijevic is a classic non sequitur that very clearly makes no sense.
- Certain other payments from structured settlements are taxable when received, such as employment structured settlements, where there is often little to nothing paid on account of damages qualifying for a tax exclusion, or where there are structured attorney fees.
- Even structured settlement payments that are income tax free may not be completely tax free. If a payee dies and the quantum is large enough there could be federal and/or state estate tax or inheritance tax implications.
Some of the other important information about structured settlement payments missed by SEO Ivan Dimitrijevic, who is not a qualified and credentialed structured settlement expert:
- Types of structured settlement payments
- Taxation of structured settlement payments where there is no payment of damages on account of personal physical injury, physical sickness, workers compensation, wrongful death.