When you are suing for damages after a car accident, taxes are probably one of the last things on your mind. However, it’s important for accident victims to know that a portion of their settlement could end up being taxable. A Corpus Christi, Texas auto accident lawyer from our firm can tell you more and help you prepare if taxes are going to be a consideration once your case has been won.
Can Car Accident Settlements Be Considered Taxable Income in Texas?
For the most part, no. The IRS is not going to see your car accident settlement and treat it like income. In most car accident cases, the victim receives what are known as “compensatory” damages. This means that you are being compensated for something that happened to you. So even when your compensation makes up for wages you missed out on, the settlement is not going to count as a taxable
Which Parts of a Settlement Are Taxable?
In some cases, a portion of the damages won are going to be taxable. This happens when you successfully sue for punitive damages. These damages are meant to punish a defendant for particularly bad behavior. If you were hit by a drunk driver or an unlicensed driver traveling far above the speed limit, these could be situations in which you are awarded punitive damages.
Because these damages are not meant to compensate you for the traumatic event and the injuries that followed, they can be taxed. It’s important to know that and properly prepare for a tax bill if you decide to push for punitive damages.
Do I Need a Lawyer to Sue For Damages?
You can sue for damages on your own, but that can be tough. A lawyer from our firm can help you build a case and prove negligence. We can:
- Gather evidence
- Talk to witnesses
- Connect you with expert witnesses
- Calculate fair compensation
- Negotiate with insurance companies
- Prevent you from making any statements that can hurt your case
- Prepare you for testimony or depositions
How Long Will It Take to Receive a Settlement?
We cannot guarantee that a case will take a certain amount of time to conclude. Some personal injury suits can be wrapped up in a few months. Others take more than a year. It all depends on factors like how many people are involved in the case, what kind of evidence you have, and whether or not an insurer will settle. What you can be sure of is that we will be by your side throughout the entire process.
Schedule Your Free Consultation
If you have been hurt in a car accident, contact Sahadi Legal Group. An initial case consultation is free and there is no obligation, so you have nothing to lose. Meet with our legal team and learn more about what we can do to assist you today.
