PERSONAL INJURY TAXATION LAWYERS
Las Vegas & Henderson, Nevada
To consult with a Personal Injury Taxation Lawyer 702.452.1500.
Personal Injury Taxation
Personal injury settlements may have unintended tax consequences. Settlement proceeds may be completely excluded from tax, partially taxable or fully taxable. It all depends on the type of settlement awarded.
Are the damages awarded in your personal settlement the result of:
- being physically injured in an accident?
- exposure to toxic chemicals or bacteria?
- injury to personal reputation?
- the death of a loved one?
If so, our Personal Injury Taxation Lawyers can advise you or your attorney on how to plan your settlement award in the most tax efficient manner allowable under the law.
If you agree to a personal injury settlement before you understand how the type of settlement you have been awarded could impact your personal income and taxes, you could be leaving money on the table to which you are rightfully entitled.
Taxation Related To Personal Injury Awards For Emotional Distress
For example, damages awarded for emotional distress not related to a physical injury or sickness are generally taxable.
If your emotional stress is the direct result of a car accident and the accident itself causes physical injuries, your award may be tax-free.
Sometimes proving this is merely the difference in letting your physician know what information your personal injury attorney needs to finalize your settlement.
On the other hand, where emotional distress is the result of employment discrimination or breach of contract and no physical injury or illness exists, a personal injury settlement awarded is generally considered taxable income.
Sometimes, an injury settlement is composed of two or more elements, some taxable, others not.
The allocation of the awards among the elements and the substantiation of the damages makes all the difference in an IRS audit.
Taxation Related To Personal Injury Awards For Punitive Damages
Punitive damages are another example of a taxable settlement award.
Punitive damages are meant to punish egregious behavior and are awarded to you in addition to any settlement you receive for the losses and injury you may have incurred.
Punitive damages are generally considered taxable when awarded as a result of a personal injury settlement.
You can see that allocating damages appropriately between actual personal injuries and punitive damages can make a huge difference in how much you get to keep.
Before Accepting Any Settlement Consult With Your Attorney About Tax Ramifications
Personal injury lawsuits may be settled in court or outside of court.
However, before accepting any settlement offer it is important to consult your personal injury attorney about taxation, to determine whether the settlement is not only fair and just but whether all or a portion of the settlement is subject to federal and/or state taxation.
If your attorney is not comfortable advising you on the full tax consequences of your settlement, ask them to call the Personal Injury Taxation Lawyers at Roland Law Firm to assist in the settlement negotiations or in drafting the settlement agreement.
Roland Law Firm has the qualifications and determination to assist its clients with their Personal Injury Taxation needs. At Roland Law Firm, our dedicated attorneys can help you tackle your Personal Injury Taxation needs, no matter how simple or complex they may be.
Contact our Personal Injury Taxation attorneys today to schedule a consultation!
Roland Law Firm
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