Taxes and Personal Injury Settlements
A successful personal injury claim often leads to a settlement or award that covers some of the costs caused by that injury. This compensation can be extremely important for the injured party, as this money may be instrumental in reestablishing financial security. However, this money can also be considered a form of income. This can put some injured people in a questionable position regarding their taxes.
If you have been injured in a car accident and you are wondering how a successful lawsuit could affect your finances, contact the Wausau auto accident attorneys of Habush Habush & Rottier S.C. at 800-242-2874 today.
Tax Status for Personal Injury Awards
According to the federal tax code, the government will not tax personal injury compensation awards. These awards are used to compensate individuals who need money to cover medical expenses and other costs. Compensation for the following is typically free from tax:
- Medical bills
- Injury compensation
- Loss of wages
- Emotional damages
- Loss of consortium
There are some types of compensation that are not exempt from taxation. These forms of compensation are generally limited to cases that do not involve the physical injury of another person, including libel and employment concerns.
If you have been injured by a negligent motorist and need legal assistance, we may be able to help. To learn more about your rights and options as an injured individual, contact the Wausau car accident lawyers of Habush Habush & Rottier S.C. today by calling 800-242-2874.