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| *Ostroff, Fair and Company>>>United States Taxes |
Do I have to pay taxes on Insurance payout to repair my roof if they are requesting that I fill out a W-9? |
Do I have to pay taxes on Insurance payout to repair my roof if they are requesting that I fill out a W-9? It sounds to me like this is a mis-use of the W-9 Form. An insurance claim settlement is not income, it is replacement of a loss. A W-9 Form would normally be given to an independent contractor by a company hiring that contractor to do work. When you receive an insurance payment as the result of a claim made for damages covered under an insurance policy, that settlement is not income. It does not make sense that you chould have to fill out a W9, which is really a request for an SSN or taxpayer indentification number, unless you are the contractor doing the work and will be paid for doing the job. Who is "they", anyway? The W-9 doesn't create a tax liability. If you had a casualty loss, report the insurance reimbursement on Form 4684. There are times when an insurance reimbursement can result in taxable gain, which is computed on Form 4684. A gain or loss depends on the type of reimbursement and the value of the item damaged before the casualty. |
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