Is Financial Compensation Subject to Taxation?
People are accustomed to having any income that they receive subjected to taxation. In the aftermath of an accident, when they are already likely to be reeling due to the consequences of the event, the matter of required tax payments can be particularly important. Plaintiffs who prevail in a civil lawsuit may recover compensation for medical bills, lost wages, and other expenses they incurred due to their injury. Most parts of these awards are free from tax liability, but there are some portions for which this is untrue.
If you have concerns about the tax implications of accepting court-ordered compensation in the wake of a civil case, do not hesitate to consult with a skilled legal representative. Contact the Kankakee personal injury attorneys of Spiros Law, P.C., at (815) 929-9292 to discuss the course that your case might take.
Financial Compensation That May Be Taxable
Because financial compensation is supposed to account for expenses the plaintiff would not have had to pay for if he or she were not injured, it is generally not viewed as income and therefore not taxed. However, there are some exceptions to the rule:
- Punitive damages that are intended to further punish the defendant
- Any interest your financial compensation earns while in the bank
You do not have to go through this time in your life alone. To discuss the potential merits of legal action in your case, consider speaking with an attorney.
The civil justice process can be confusing, and committing certain errors could potentially derail your case before it even begins. Do not take a needless risk in this situation. Contact the Kankakee injury lawyers of Spiros Law, P.C., by calling (815) 929-9292 today.