What You Need to Know About Personal Injury Compensation and Taxes
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You’re Hurt. You Settle. But Will Uncle Sam Take a Cut?
If you’ve been injured in a truck accident, one of the most common questions we get at Stewart & Stewart is:
“Will I have to pay taxes on my settlement?” The short answer? Usually not. But let’s break it down so you know exactly what to expect.
Most of Your Settlement Is Tax-Free
When you receive a personal injury settlement—whether from a semi-truck accident, a pickup, or another vehicle—the portion that goes to you for pain and suffering, medical bills, and other out-of-pocket losses is not considered taxable income. You don’t even have to report it on your income tax return. Why? Because it’s not “earned income”—it’s compensation for what you’ve gone through.
One Small Exception: Lost Wages
There’s one area that might carry tax implications: wage loss compensation. If part of your settlement specifically reimburses you for missed work or lost earnings, that portion could be taxable. But don’t worry—we’ll walk you through that part and make sure you understand exactly how it’s structured.
Our Fees Are Taxed—Not Your Settlement
Attorney fees, like those we earn at Stewart & Stewart, are taxed on our end—not yours. That’s part of running a business. But your portion, unless it involves wage replacement, is yours to keep, tax-free.
Let Us Help You Maximize Your Recovery
Whether you’re navigating the aftermath of a serious truck accident or just trying to understand the fine print, we’re here to guide you every step of the way. Contact Stewart & Stewart today—we’ll handle the hard parts, including the taxes.