Does the Tax man like structured settlements or not is the one hundred thousand dollar question?
A Structured settlement that will pay out in regular installments and be seen as income are favored by the government as well. This is not because your tax bill ends up being higher but rather a lower tax bill will induce you to spend more and increase your discretionary spending. Settlements are viewed in a positive light in the financial regulatory system.
Since the government spending is not only fueled by debt but also by taxes there seems to be a conundrum as to why the government would not want to increase tax installments.
The rather shocking reason for this is that they want to have less work and less assistance that is needed when a structured settlement is in place. This results in regular monthly payments and equal payment streams that would be received by investments in the equity or debt markets.
Also the longer that the government is economizing the assistance to those in need translates into a more generous effort to help reduce the tax base. A payment from a settlement continues over time and will make for a much more secure and lower risk income stream for the beneficiary.
With a lump sum payment many will have the worries as to the possible risk of financial ruin due due to the possibility of bad investment choices or spending beyond ones means. With payments spread out over time it just seems to make more logical sense to most.
With better security payments helps one to get on with their life and back to paying their bills on time.
No wonder why the United States government and IRS approves deals every single day. Something to the tune of 300,000 a year at last count an expert industry watchdog said according to a recent report. Does this in depth article just now mean that structured settlements are always the most viable solution for you? Sometimes yes and sometimes no. That all depends on the financial requirements that may dictate other solutions. For most americans however, regular income from such settlements fits perfectly with their lifestyle and needs.