If you have been injured in an accident and have received a personal injury settlement, you may be wondering if the money is taxable. The answer to this question is not always clear-cut, but in general, most personal injury settlements are not considered taxable income. Any money that is considered taxable income will be subject to federal and state taxes. In this blog post, we will discuss the tax implications of personal injury settlements.
If you have received a personal injury settlement, you should speak with an accountant or tax attorney to determine how the money will be taxed. They will be able to help you navigate the complex tax laws related to personal injury settlements. Your settlement may be for medical bills, lost wages, pain and suffering, emotional distress or another type of damages. Once you know the type of payment you’re going to receive, you can look at the tax liability for that kind of settlement. An experienced personal injury attorney, like Adam Miller, The Texas Bulldog, will be able to explain everything in greater detail. If you have any questions please call 713-572-3333 for a free, no-obligation case review.
Medical Bills, Attorney’s fees and Loss of Consortium
Medical bills, attorney’s fees and loss of consortium (Loss of consortium in Texas means that you have been deprived of a relationship’s benefits due to an injury or death) are usually not taxable.
For money received in a settlement for lost wages, you are only entitled to recover the net after-tax amount of your lost wage claim. Lost wages ree taxable, just like regular wages.
Punitive damages are awarded to the plaintiff as a punishment for the defendant. These are always considered taxable.
Pain and Suffering
If you have been physically injured, the settlement you receive in payment for pain and suffering is not taxable. However, if you were not physically injured and were awarded a settlement for mental anguish, this money can be taxable.
Contact an Experienced Texas Personal Injury Attorney
Thank you for reading our blog post on personal injury settlements and taxes. We hope this information was helpful. If you have any questions about personal injury settlements or tax law, please contact our office. We would be happy to help you navigate these complex topics. As with any type of accident, an experienced personal injury attorney can help you get the compensation you deserve for your injuries. Contact us today for a free consultation by calling 713-572-3333 or emailing email@example.com. Our Personal Injury team can help you file a lawsuit, obtain a settlement and even fight your case in court if necessary.