Most people don’t really know how bail works. They don’t even know if there is any tax imposed on the bail amount. Well you no longer need to worry about that! Here’s all you might want to know about what IRS has to say about bail bonds:
The Basics of Bail
So before talking about bail bonds and taxes, you should know the basics about bail. It refers to the money that people pay in order to get out of jail. However, it doesn’t mean that you’re free.
The accused will still have to show up for court hearings, whenever they are summoned by court. The bail amount will basically serve as a guarantee and you will get it back once the case has been resolved.
Another thing that you need to know about bail is that the amount varies. It depends on the crime committed. Sometimes people cannot afford to pay the entire amount on their own. In such cases, you can opt for the services of a bail bondsman.
In case of a bail bondsman, you will be required to pay 10% of the bail amount in advance before you’re released. The remaining amount will be paid by the bail bond company.
Once the trial is over, you wouldn’t get back the amount you had paid to the bail agent.
Reimbursement for Expenses
Bail agents have the right to claim reimbursements for the expenses that they have incurred because of their clients. They might also charge the defendants for travel and phone call costs.
These reimbursements should be considered an income by the bail agents. The state law requires that the agent keep a copy of the charges and provide it to their clients.
Payment Deductions
Bail companies usually make payments in the BUF accounts that are held by surety companies. Naturally, people might have questions if this amount is deducted or not.
For a long time, case laws have stated that liabilities paid through this account are not deductible.
Taxation
It’s natural to assume that tax is deductible on the bail amount since you’re paying money to a government entity. However, that’s not really the case. See bail is not really a tax, it’s more of a fine therefore, tax is not deductible on the bail amount.
Want to get a loved one out of jail quickly? Get in touch with us. We offer 24 hour bail bond services in Indianan and you can contact us at 260-578-0505 or visit our website for further details.
