Got $ from insurance co., do I have to spend it to fix my car?

[CinderElmo]

This board has all the answers! Let's see if anyone knows this one.

I got money from an insurance company for damage their client did to me. The money was based on an estimate from a body shop to have the damage on my vehicle fixed. If I have the repair done somewhere else for cheaper do I have to report the extra money I saved as some sort of "income" when tax time arrives?

I like to play fair to avoid any hassles with "the man." But I also like $$$.

'preciate the ideas!

 

[Ulfwald]

You do not have to pay income tax on that money, that was paid to you to compensate for a LOSS.

But remember this, you get what you pay for in body shop work.

 

[Engine]

I don't know about reporting it, but I recently got in an accident, too, where it was the other guys fault. The place where I took the car to get fixed charged me quite a bit less than amount of the check that the insurance company wrote me, so I just put the overage in the bank. Gotta pay for the wife's school somehow 🙂

 

[kranky]

You can keep all the money if you want and not have the repair done at all. No income tax problem.

That's not cheating anyone.

 

[StageLeft]

I know a guy who has gotten in a few accidents (not his fault) and just didn't bother fixing the car, kept the cash for himself. It doesn't seem morally wrong anyway...

 

[rahvin]

do the body work yourself and save even more money. Or better yet, don't do any body work and pocket the whole thing. Just remember, you do get what you pay for with body work. Having paint peel 6 months after getting it done isn't a fun experience...