If you are considering filing a personal injury claim, you probably have a lot of questions about the process. You want to make sure that your efforts won’t be wasted. Personal injury claims can be a lot of work, so you want to make sure you come out the other end with a settlement you can use to right the wrong that has been done to you.
One of the questions you have is probably related to how much money you can expect to receive in a settlement. Another question you will probably have is whether you will have to pay taxes on your settlement. It would be pretty frustrating if you work hard to secure a settlement and then the IRS takes half of it.
Taxes are often confusing and complex, which is why so many people have their taxes handled by a professional. You can get a lot of your questions in this case answered by a personal injury lawyer. Below, here’s some basic information about whether you have to pay taxes on a personal injury settlement.
Are Personal Injury Settlements Taxable?
Luckily, most personal injury settlements are not considered taxable income. The settlement is primarily considered to be a reimbursement for losses you’ve already sustained or will sustain in the future because of your injuries. Because this money is not considered income, it is not generally taxable.
That means that when you get your settlement check, you should get to keep it. There are always exceptions, of course.
One exception is if you paid medical bills related to your injury accident but then deducted those medical costs from your tax bill. If you are later reimbursed for the money you paid for those medical costs, you will have to pay taxes on the medical portion of your settlement.
This is only true if you deducted those initial medical payments from a tax bill. If you did not deduct those medical payments from a tax bill, you will not have to pay taxes on the medical portion of your settlement.
In other types of lawsuits not related to a personal injury or illness, you could be taxed for a settlement amount given pertaining to emotional distress. With a personal injury case, a settlement paid to you for your emotional distress and pain and suffering is not taxable.
Should I Talk to a Personal Injury Lawyer?
You might want to work alongside a lawyer because then you will know you have done things by the book. It’s no fun to receive a settlement and worry that it could be taken from you by the IRS. A lawyer can give you legal advice and guide you through the entire claim process, which can be a great relief to you.
Talk to a Personal Injury Lawyer in Nevada
If you were injured in Las Vegas, Nevada, reach out to a Las Vegas personal injury lawyer for help with your claim. Call 702-929-2289 or complete the website submission form below to reach Adam Smith Law and get a free claim assessment.
Adam Smith Law