In many states, such as Nevada, the settlement from your insurance company following a car accident is not taxable. So when you receive payment for the repairs or for replacing your vehicle if it was totaled, you don’t have to worry about the IRS demanding part of that money back in taxes. This can be a great relief to families suffering from high expenses after an accident.
However, there are some items that you could be compensated for in a lawsuit that may result in higher taxes. For help in getting the maximum compensation and to know what taxes you can expect to pay, talk to one of our knowledgeable personal injury attorneys today.
What Compensation from My Car Accident is Taxable?
Some items that can bring in compensation in a car accident lawsuit may be taxed. These include payments for things the IRS does not consider directly connected to your injuries, such as lost time at work.
You could be taxed for the following items received in a car accident claim:
- Lost income in the form of salary and hourly wages
- Lost promotions
- Lost business opportunities
- Reduced income-earning ability
- Lost employee benefits
- Lost vacation time
You may also be taxed for any punitive damages awarded to you since these are considered compensation for the intent or gross negligence of the at-fault party rather than compensation for your injuries.
What Other Payments are Not Taxable Following My Car Accident?
There are still many items that you can be reimbursed for that will not be taxed, such as medical expenses.
Damages that are not taxable in your car accident case include:
- Past and future doctor’s visits
- Ambulance charges
- Medical treatment devices such as crutches
- Specialist charges such as bloodwork and physical therapy
- Hospital costs
- Past and future pain and suffering
- Emotional distress
- Loss of enjoyment of life
- Property damage
- Loss of companionship if your loved one died in the accident
Contact a trusted legal professional like those at our law firm for help collecting the full amount of damages owed to you following your car crash. Your attorney will be able to tell you which damages may be taxed and which will not and will build a solid case to get you the maximum compensation for your injuries.
Can a Lawyer Help Me Avoid Overpaying Taxes?
Our excellent personal injury lawyers understand the law and will be able to counsel you on how to pursue full compensation for your injuries and how to avoid overpaying taxes. We understand that this is a difficult time for you and your family, and we will gladly help with the complicated legal process so you can focus on resting and recovering.
We have helped many individuals find justice after being injured because of someone else’s reckless driving. We believe that every victim of negligence deserves to get the maximum compensation for their injuries, and we promise to help you meet your goals in your car accident claim. Contact us today at (702) 631-6111 to schedule a free consultation and see what our talented legal team can do for you.