When you’re compensated for a physical injury, it isn’t taxable

Generally, this is true for both federal and state laws, regardless of whether you settled in or out of court. Federal tax law (the IRS) excludes any damages that you received due to personal physical injuries or physical sickness from your gross income. This is because the IRS sees that you’re being compensated for things like medical bills, pain, and suffering, lost wages, loss of consortium (business), emotional distress, and attorney fees.

There are some exceptions to this rule

Before you walk away thinking that you’ll never be taxed for any money that comes from these settlements, you should know that there are some times when the settlement money is taxable. It’s important to know what these are so that you aren’t surprised by them.

Settlements from a breach of contract are always taxable

Even when suffering from a personal injury or physical sickness, your damages will be taxed if they relate to a breach of contract. In other words, when a breach of contract results in your injuries and thus serves as the basis of your lawsuit, any settlement fees are taxable.

Punitive damages are always taxable

A court may include payment for punitive damages in your settlement. These are considered “punishment” for especially harmful behavior on the part of the defendant. Your lawyer should ask the judge to separate this verdict into punitive damages and compensatory damages to ensure that you’re able to prove to the IRS what part of the verdict was for compensatory damages since they aren’t taxable.

Interest in your judgment in a personal injury case is taxable

Another part of your personal injury verdict, which is taxable, is any interest in your judgment. In most states, there are court rules that add interest to your verdict based on the length of time your case was pending. For instance, if you were to file a lawsuit on January 1, 2019, you should receive interest starting on this date and running until you receive payment. This means that if you don’t win your trial until January 10, 2020, and then the defendant enters an appeal that drags the case out until March 31, 2021, you’ll receive two years and three months of interest payments on top of the amount you receive in the verdict. Unfortunately, you’ll be taxed for this part of your settlement.

Take some steps to ensure that as much money as possible isn’t taxable

If you have two claims against a defendant (one personal injury and one emotional injury), make sure that it’s explicitly stated in your settlement agreement how much money is for each type of injury. This is especially important when you’re being offered more money for your injuries than you are for your emotional injuries. Although this is something that the IRS can still challenge the non-taxability of your settlement, having this in writing will give you the best chance of success.

For more information on personal injury cases or help with settling yours contact the Blenner Law Group Palm Harbor in Palm Harbor, FL, today.

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Take into account the fact that personal injury attorneys based in the state of Florida will only accept personal injury cases on a strict basis. They only get paid if you win the case, so personal injury attorneys tend to be quite blunt when it comes to your chances of winning.

Knowing about the things which these attorneys take into consideration will help to prepare you for what you can expect if you ever need to file a personal injury lawsuit.

The carelessness of the Defendant

There are a few things that need to be shown to prove liability when filing a personal injury lawsuit. For starters, the defendant must have owed a duty of care to the plaintiff to use reasonable care. Then, the defendant must have breached that duty. And finally, the injury resulted due to that breach of duty.

First and foremost, if you are unable to show that the defendant failed to use reasonable care then you have no basis for your case. What counts as reasonable all depends on the circumstances surrounding the accident, so this varies from case to case.

Insurance Policies

Taking advantage of the various insurance policies that may be available is another thing that can help to bolster your case. Insurance policies can help you to gain more awards and money from the case, assisting in your recovery.

If you are involved in a traffic accident with a shipping truck then you might be able to take advantage of many different insurance policies. Not only is the driver of the truck liable, but the carrier and even the shipping company owe you compensation.

Getting a professional personal injury attorney, such as those available at the Blenner Law Group, is essential. This is because many insurance companies will do all that they can to avoid paying you what you are owed.

Any Pre-Existing Conditions

In Florida, it is quite common for defenses to say that injuries you may have sustained were there before the incident. That means that you should carefully prepare your case to ensure you can prove that the injuries you sustained were caused by the defendant.

Don’t stop at your physical damages, though. Make sure to take note of the damages to your finances, professional life, and emotional state, as these can all be used to bolster your case.

Conclusion

This list is not complete, and many other things should be taken into account when attempting to file a personal injury case. The specific facts and information of your case will dictate how things should be handled.

If you have been injured and are looking for compensation and justice then make sure to contact the expert professionals at Blenner Law Group. With all of the things that you need to take into account to get the justice that you deserve it’s best to have a professional attorney there who can guide and assist you every step of the way.

Don’t settle for less. Over 25 years of experience and a heart to assist in any way he can has made Walt Blenner a premier personal injury attorney in the Palm Harbor and Tampa Bay area. Get your injury case evaluated at absolutely no cost, and take the first step towards compensation today.

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The post Things That Could Affect A Personal Injury Lawsuit appeared first on Blenner Law Group.