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Okay, let’s tackle that wonderfully dreadful mouthful of a question:
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—, are insurance payouts taxable aggresively?
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7)
Now, I'm not here to bore you with actuarial tables and the finer points of the Internal Revenue Service. Instead, let's approach this as if we were explaining it to a very confused badger who just won the lottery (specifically, his homeowner’s policy covered a freak squirrel-related incident that decimated his prize-winning marrow patch. Seriously. It happened.) Basically, here's what we mean when we ask if an "—— payout is taxable.": The Short & Slightly Terrifying Answer: Generally? Yes! Most of the time, winnings from your homeowner’s, car wreck, or even that freak squirrel-marrow incident, are considered UNRELATED income . It's like a little pink piggy bank suddenly shouting "Here's money I absolutely did NOT earn and now you have to pay about 20% on this totally undeserved windfall!"! (It gets more complicated if the payout is for deductibles, of course. You get to deduct the deductible amount. We are not here to discuss deductibles.) The More Detailed, And Therefore Much Weirder Answer: The IRS really loathes free stuff, even when you've paid your premiums years beforehand and then a furry-faced rodent wreaks havoc. They
