Personal Injury lawsuit
In any Personal Injury lawsuit, you will either have a settlement or a verdict. A payment is an agreement between the parties to “settle” the case and avoid taking the case to court. Taxes personal injury recovery
Taxes on your settlement
A verdict is when a judge or a jury is presented with evidence and will decide the case. For example, how much money one party owes the other. But the question is, do you have to pay taxes on your settlement or verdict? Taxes personal injury recovery
Are personal injury lawsuits not taxable? Taxes on personal injury recovery
In general, any recovery from a personal injury lawsuit is not taxed, whether it’s the result of a verdict or a settlement. However, three different aspects of a confidential injury settlement or a judgment are taxed. They are three types of damages that are taxed in a confidential injury settlement or a verdict:
(1) Compensation for emotional injuries
(2) punitive damages, and
In a Personal Injury lawsuit, a plaintiff must be compensated for all his damages (past, present, and prospective), both special and general. This includes fair and adequate compensation for economic damages, such as medical expenses and lost earnings, and noneconomic damages, such as pain and suffering.
Emotional Distress Suffered
A plaintiff’s noneconomic damages include damages for emotional distress from a physical injury. For example, a plaintiff is struck by a piece of metal when the engine blows on a defectively manufactured lawnmower. The metal part lodged in her spine at an inoperable location, significantly increasing her risk of future paralysis. The plaintiff here can recover damages for her physical injury and the emotional distress she suffered from her knowledge of the risk of paralysis.
Black’s Law Dictionary defines punitive damages as “the costs awarded to a person due to negligence that has caused ‘personal injury or damage to ‘personal property.” “It is a payment by the person to the ‘injured party’ as a punishment’ for reckless behavior.”. Punitive damages are generally not available for negligence cases. Nevertheless, if the defendant’s conduct was “wanton and willful,” reckless, or malicious, then under Texas law, a plaintiff is permitted to recover for punitive damages.
Finally, any interest owed on a verdict or a settlement is taxable. Thus, the three recoveries mentioned above for damages are taxable. You should always ensure your settlement or verdict is clear about compensation amounts for injuries.
Houston Lawyers can help you.
In conclusion, you must discuss your case with an attorney who will care for your case. You should always take the proactive approach of asking your attorney about the damages you are recovering and talking to a financial specialist for taxable settlements and verdicts.
At Houston Area Injury Lawyers, PLLC, our firm focuses on representing those who have suffered a personal injury through the recovery process – physical, emotional, and financial recovery from injuries. We help clients tip the balance of justice into their favor through our years of experience and expertise and our vigorous representation of injured clients. Our care and preparation are the keys to our success. The Houston Area Injury Lawyers, PLLC, can help you navigate this issue and answer any questions you may have. If you want to speak to someone about your situation or for a free consultation, call our office at (713) 366-HURT (4878)—Tip the Balance in Your Favor.
* At Houston Area Injury Lawyers, PLLC, we pride ourselves on helping our clients recover fully – physically, emotionally, and financially. Our clients are our family. We stand ready to help your recovery from your injury. Contact us today. http://www.houstonareainjurylawyers.com.
(713) 366-HURT (4878)
A case involving Harris County Courts can be complicated. Proving the legal elements with clear and convincing evidence is a daunting task. Houston Injury Lawyers, PLLC, can help you navigate this issue and answer any questions you may have. Se Habla español.
Houston Injury Lawyers, PLLC Taxes Personal Injury Recovery
We have the experience and resources necessary to guide you and your family through the civil court proceedings. Your injury claim will entail and help you approach the situation with great confidence and understanding.
Contact us to schedule a free case review and find out how our firm can assist in your recovery.
State of Texas
They are pursuing a personal injury lawsuit in Texas that allows victims to recover their damages and seek compensation for their pain and suffering.