Are Financial Compensation Awards Taxable?
Victims of personal injury accidents are legally entitled to seek financial compensation from the party at fault for their injuries. However, many plaintiffs do not know whether the financial compensation they receive is subject to taxation. This is an important point to address, especially in the process of paying off medical bills and other accident-related expenses.
At the Law Offices of Tragos, Sartes & Tragos, PLLC we are here to answer your questions regarding personal injury cases and address your legal needs. To learn more about the details of your financial compensation, contact a knowledgeable and caring Clearwater personal injury attorney by calling us at (727) 441-9030 today.
Types of Taxable Compensation
Most forms of compensation you can receive after a successful personal injury case is free from federal income tax. This includes court-ordered awards and out-of-court settlements. However, there are some exceptions that are subject to taxation. The following payments are taxable:
- Compensation given for lost wages
- Any punitive damages the plaintiff receives, which are intended to further punish the defendant for his or her actions
- Interest your financial compensation accrues while in your checking or savings account
Fortunately, a knowledgeable Clearwater personal injury lawyer can help you secure your compensation as well as understand how it can be taxed.
At the Law Offices of Tragos, Sartes & Tragos, P.L.L.C., we can discuss your case and legal options with you following a personal injury accident. To learn more about financial compensation and income taxes following a personal injury accident, contact an attorney today at (727) 441-9030.