23 May, 2022
Imagine you just received full compensation for being involved in a trucking accident. You can use this money to fix your car, pay medical bills, or buy a new car. But you may be thinking, “Do I have to pay taxes on my settlement?” Fortunately, the short answer is no. You won’t have to pay taxes on most motor accident settlements.
However, there are cases where some of your compensation is taxed. To fully understand how much of your settlement is taxable, reach out to a personal injury attorney or a tax attorney.
There are several different types of compensation you can collect in a truck accident settlement. The first is measurable and objective, which are your medical bills and lost wages. You may also be able to collect emotional damages, which include any pain and suffering you endured.
As part of a personal injury settlement, you can receive compensation for surgery, hospital stays, and physical therapy. The victim usually has to pay medical expenses out of pocket. So, any payment you receive for medical expenses or injuries is not taxable. The money you are receiving is a reimbursement, not actual income.
Any compensation you receive for vehicle damage resulting from a motor accident is not taxable. The payment covers the amount it costs to repair your car or reimbursement from a rental car. Similar to medical expenses, you are getting reimbursed for out-of-pocket expenses.
After a motor accident, victims may be in considerable pain for a significant amount of time. Hospital stays, doctor visits, and physical therapy appointments can force the victim to take a lot of time off work. Any compensation you receive for lost income is tax-deductible. Your regular income is taxed, so any payment you receive from loss of wages is also taxed.
An accident is a shocking event that could bring much emotional distress. Compensation for emotional distress is tricky when it comes to what’s taxed. This form of compensation may be taxable, depending on the situation.
For instance, if you’re in a car accident and sustain severe back pain. You may fall into a depression that requires medicine and regular therapy visits. Since your distress comes directly from the injury, these costs will not be taxed.
However, say you’re in a car accident and witness your child or spouse become seriously injured. Watching a family member get hurt is very traumatic, and you may receive compensation for it. Since the damage in this example does not arise from your physical injury, this compensation is taxable.
It’s rare for punitive damages to be part of a motor accident settlement. This category of personal injury damages is a punishment against the defendant, and they get awarded if the defendant engaged in outrageous behavior. In any case, punitive damages are always taxable.
The rules about paying taxes on your truck accident settlement can be complicated. Once you receive your compensation, it’s essential to speak with your attorney before filing your tax returns. A top-rated personal injury attorney at The Barnes Firm can help navigate your case’s complexities and answer any questions you may have.
At The Barnes Firm, our top priority is ensuring that all our clients receive high-quality representation. We’ll fight for you to receive the compensation you deserve and help you understand what part, if any, is taxable. Reach out to The Barnes Firm to discover all the ways we can help you after a motor accident. Complete our online contact form or call us today to schedule a free consultation.
The Barnes Firm (800) 800-0000
Written by The Barnes Firm, reviewed by Richard Barnes
Rich Barnes
President
Richard Barnes: “As President of The Barnes Firm, I have dedicated my career to achieving justice in hundreds of cases for the victims of injuries caused through the fault of others. Additionally, I have been honored to have been elected Best Lawyer and a Super Lawyer”
Years of Experience: 30+ years
LinkedIn Profile: Richard Barnes
Getting our clients the best results possible.
or call us at
(800) 800-0000
“I had an outstanding experience with The Barnes Firm, thanks to Nahuel Cruz and Aybike Donuk. Their professionalism, expertise, and dedication were evident through...
“Both Jeff Bodily and Mayra Wallis were wonderful to deal with. Very professional, knowledgeable, supportive and helped me navigate through a very stressful time af...
“My personal Injury Attorney was Jake Otis, he provided accurate timely advise and encouragement throughout the process. He is a true gentleman , his knowledge and ...
“I’ve had an exceptional experience with Mory Ahmadi, Esq. from the Barnes Firm. Mory’s professionalism, knowledge of personal injury law, and compassionate app...
“My personal injury lawyer was The Barnes Firm, they helped me with my injury lawsuit. I can’t thank them enough! John Sheehan and his team were there for me ever...
“I had a great experience working with Richard Amico and his team. They were responsive to my questions and got me a great settlement. They definitely were working ...
This page has been written, edited, and reviewed by a team of legal writers following our comprehensive editorial guidelines. This page was approved by attorney president Rich Barnes who has more than 30+ years of legal experience as a practicing personal injury trial attorney.
The Barnes Firm is here to help you. Our personal injury firm helps individuals and their families who
have suffered an injury in an accident.
Whether your car crash was minor or serious, any injuries sustained in an accident can be painful and costly.
All motorcycle accidents are different, the compensation you receive will depend on the circumstances surrounding your accident.
A truck accident can be catastrophic, even in low-impact crashes, if you or your family are involved, you may be entitled to significant financial compensation.
There are dozens of accidents involving school buses each year, most commonly, involving children outside a school bus.
Explore Articles Related to Your Situation
What is the Average Truck Accident Settlements and Verdicts? Truck accidents often involve mul...
read more If you’ve ever been in a car accident as a result of someone else’s negligence, you know th...
read more
Truck driver logs serve as critical documentation of a driver's activities and compliance with ...
read more
Truck accidents often have substantial consequences, resulting in severe injuries for those inv...
read moreWe are always available to discuss your case. Give us a call at (800) 800-0000.
Fill out our form and we will contact you shortly to discuss your case
Our attorneys will come to your home, office or hospital at your convenience.
We are available anytime, including after hours and
weekends.
420 Lexington Avenue
Suite #2140
New York, NY 10170
Phone: (800) 800-0000
Fax: +1 (800) 853-5153
600 Old Country Road
Suite #425
Garden City, NY 11530
Phone: (800) 800-0000
Fax: +1 (800) 853-5153
500 Pearl Street
Suite #700
Buffalo, NY 14202
Phone: (800) 800-0000
Fax: +1 (800) 853-5153
451 Grider Street
Buffalo, NY 14215
Phone: (800) 800-0000
Fax: +1 (800) 853-5153
28 East Main Street
Suite #600
Rochester, NY 14614
Phone: (800) 800-0000
Fax: +1 (800) 853-5153
633 West 5th Street
Suite #1750
Los Angeles, CA 90071
Phone: (800) 800-0000
Fax: +1 (888) 800-7050
555 12th Street
Suite #1470
Oakland, CA 94607
Phone: (800) 800-0000
Fax: +1 (888) 800-7050
655 W. Broadway
Suite #940
San Diego, CA 92101
Phone: (800) 800-0000
Fax: +1 (888) 800-7050
