tax-Insurance Claim "Tier tax" Question

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Joined: Thu Jan 26, 2017 10:54 am

PostPosted: Thu Jan 26, 2017 2:17 pm
Hello everyone. I have an Auto Body Shop in south Fl and we work with insurance companies. When an insurance company issues a check , they pay a "Tier 1" and a "Tier 2".
The Tier 1 is always at 7% on an estimate under $5,000.00 and then the Tier 2 is marked down to a 6%. on anything that goes over $6,000.00

Ex: If the total estimate is $5,100 before tax, then they pay $500 (which is 7%) and a second "Tier 2" of $7 (which is 6%).

Can someone please explain this me? My question is, what percentage do I report? Or do I charge that 1% to the client?? Or do I just report that same amount of tax that the insurance is paying us??

Thank you.

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Joined: Fri Feb 05, 2016 7:09 am

PostPosted: Mon Jan 30, 2017 10:16 pm
Don't quite understand your question but here goes..... What ever the ins co pays you in a check that is income to you so that is taxable . I don't get the # 1 and #2 thing :?:

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