Whether you were hurt in an auto accident, a motorcycle accident, by a defective product or medical device, or due to a doctor’s mistake, you need and deserve compensation for your injuries. You’re facing expensive medical bills and a potentially long absence from work. You may even have suffered disabling injuries that mean you’ll never be able to work again.
Hiring an attorney can help you get the money you need to recoup your lost wages, pay for your medical bills, and stay on top of your family’s daily living expenses. Our Oklahoma personal injury lawyers fight hard for victims like you, but we also know that many accident victims have another major concern on their minds even after winning their settlements: taxes. How much do they owe, and when do they owe it?
Good News: You Likely Won’t Owe Taxes on Your Compensation Check
Whether you’ve already received a personal injury settlement, or you’re wanting to pursue a claim, you can breathe a sigh of relief. Neither the IRS nor the state of Oklahoma will come after your damages, provided they’re considered compensation for a physical injury. U.S. tax code specifically excludes settlements related to personal injury lawsuits from taxation.
The definition of physical injury is broad and includes a significant number of personal injury claims, including both actual injuries and even illnesses caused by another person’s or party’s negligence. Victims can also sue for damages in addition to their medical bills, when these damages are a direct result of their injuries, including:
- Lost wages
- Emotional distress
- Pain and suffering
- Loss of consortium
- Attorney fees
Whether we convince the insurance company to settle right away, or they fail to play ball and we take them to trial, the money is yours, free and clear, if we win your claim.
There Are Always Exceptions to the Rule
Unfortunately, the IRS isn’t completely exempt from pursuing some of the money that injured victims can get from settlements. There are four primary ways that the federal government may be entitled to some of your compensation check:
- Your injury or illness was the result of you breaching a contract, and that breach of contract is the basis of your lawsuit.
- You were awarded punitive damages at trial, which are always considered taxable.
- You accumulated taxable interest on the judgment from the time your claim was filed until the day you receive your check.
- Your compensation claim was solely for emotional damages with no physical injury—i.e., emotional distress or employment discrimination.
If you’re unsure of whether you’ll have to pay taxes on a settlement that you’re thinking about pursuing, it’s important to get in touch with an experienced Oklahoma personal injury lawyer right away. At Parrish DeVaughn, we can help you know what to expect and how to best prepare your claim in anticipation of a potential taxable award.
Language Matters in Settlements—And Our Lawyers Can Protect Yours.
In addition to doing everything in our power to maximize your settlement, our lawyers will also work hard to ensure that every bit of your damages is properly classified and labeled during the negotiation and communication process with the insurance company.
That will leave no doubt about what’s taxable and what isn’t if and when your check arrives. When you desperately need money for your accident-related expenses, the last thing you want is to be hesitant to spend it because you’re worried the IRS will come calling.
Don’t take any chances with your claim or you’ll risk owing money unnecessarily to the IRS. Get in touch with our legal team to find out how we can help. We know what it takes to build claims that not only maximize our clients’ chances of winning, but also put the most money in their pockets with no strings attached. Call today.
