How do Class Action Settlements affect my tax returns at the end of the year?

Question

Am I going to have to pay some money back to the IRS because of the settlement checks I’ve received? I’ve read that it would be considered taxable income but I don’t exactly understand what that means. Will my tax return be less than usual because of this settlement check?

In: Other

Answer 1

Class action settlement checks are usually taxable. That means the IRS might count them as income, which could affect your tax return. It’s a good idea to consult a tax pro for specifics.