Dean Richard Hedeker's Answers

Do I owe taxes on settlement money?

Yes this is taxable income. It is taxed as though you worked and earned the income. You need to consult a tax professional in your area. Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client...

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How to calculate actual tax rate?

There are many different answers to your question. The calculation that you are using total tax divided by income will give you the effective tax rate, but generally that is not what people refer to when they discuss your tax rates. Usually what is referred to as the tax rate is what we call the marginal tax rate (the rate of tax you would pay on the next dollar of income). The marginal tax rate is the rate we use for most tax planning. But the marginal tax rate does not take into account any...

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