Is a Personal Injury Settlement Taxable?
Understanding Your Case Compensation
When undergoing a personal injury case, many clients are, understandably, concerned about how much of their settlement they actually get to take home. Between attorney fees, vehicle costs, and other health issues that may come up down the line, it's not uncommon for many to assume that additional hidden fees may come into play.
Fortunately, one of the things you shouldn’t worry about is whether your personal injury settlement will be taxed.
Settlements are Often Tax-Free
Under U.S. Code § 104 of the tax code, settlements for personal injuries are not classified as gross annual income and are therefore exempt from tax laws (which isn't the case for all legal disputes). This also applies to workers’ compensation cases involving both injury and illness.
That being said, there may be some instances in which a personal injury case does include some taxable damages. You can view an outline from the IRS on these matters here. The majority of personal injury cases, however, are likely to result in a tax-free settlement if they are structured correctly. This is where you really need the right attorney for your case.
Trust the New Orleans Personal Injury Attorneys
Personal injury cases can be complex and involve a lot of red tape. When you have an injury case, spend more time focusing on your healing and less time stressing about the outcome in the courtroom.
Working with the right attorney for your case can save you from a major headache down the line. The The Chopin Law Firm LLC attorneys have over 75 years of combined experience advocating on behalf of injured victims both in and out of the courtroom. To get started with a free consultation, call (504) 475-2429 to get in touch with a member of our team.