Personal Injury Payments and Taxes
When a person receives a sum of money from a personal injury settlement, one important concern regarding this money is whether it is taxable or not. As this money often acts as a form of compensation for injuries sustained in accidents, a person can use these funds to cover the high costs of their medical bills. However, funds which are subject to taxation can be sizably reduced and may actually fail to fully compensate an individual’s losses.
For help in seeking the full and fair compensation that you are due if you have been hurt in a car accident caused by another party’s negligence, contact the Rhinelander car accident attorneys of Habush Habush & Rottier S.C. ® at 800-242-2874. We are passionately committed to helping accident victims to obtain the resources that they need to better promote their recovery.
Tax-Free Settlement Money
The tax code handles elements of personal injury settlements differently, depending upon the circumstances. While the majority of these cases result in tax-free status for compensation, there are other instances in which a person may have associated tax liabilities. In particular, libel claims and similar cases not involving the direct injury of a person tend to be taxable. On the other hand, the following are not taxed:
- Injury settlements
- Emotional distress settlements
- Medical and lost wage compensation
These payments are untaxed, regardless of whether the money was gained through a settlement, or jury award, and it does not matter whether they were paid as a lump sum or structured plan.
If you have been injured in a car accident because of another person’s negligent behavior, contact the Rhinelander car accident lawyers of Habush Habush & Rottier S.C. ® by calling 800-242-2874. Let our experienced legal advisors assist you today.