Will I Have To Pay Taxes On My Personal Injury Settlement?

You’ve been injured in an accident in Savannah, Georgia, and that experience was one of the worst of your life. Now you’re fighting for compensation for the accident and losses you suffered. But what if the IRS takes a big chunk of the money you need to survive after your accident?

You want to get the most money you can from a personal injury settlement because you have suffered in many ways. You might not be able to work right now due to your injuries, which means you have no income coming in. You need every penny from your settlement to provide for your future.

Perhaps you have a permanent disability caused by your accident. What if your settlement is intended to provide you with financial support for many years or for the rest of your life? If the IRS comes in and takes a portion of it, that action could greatly reduce the money you hoped to live on.

Is a Personal Injury Settlement Taxable in Georgia?

Thankfully, most personal injury settlements are not taxable. For example, if you receive a settlement for injuries, mental trauma, pain and suffering, medical bills, and lost life enjoyment, you can keep all of that money in most cases. However, there are always exceptions.

For example, if you paid medical expenses after your accident and those payments were deducted from your taxes that year, you will have to pay taxes on your settlement money for medical expenses. This would include only the medical expenses portion of your settlement, not the entire settlement amount.

Another exception would be receiving a settlement for loss in value of property. If your settlement amount provides you with money over the adjusted basis in the property, the excess settlement money is considered taxable income.

Why You Might Need a Lawyer

Taxes and personal injury claims are complex. You don’t want to get anything wrong, miss out on settlement money you might be entitled to, or fail to pay taxes you owe. One good way to ensure your personal injury claim goes smoothly is to partner with a personal injury lawyer at our firm.

Your lawyer can give you legal advice from the start and can guide you through the entire claim process. Help from a lawyer reduces your chances of making mistakes and ending up with more headaches down the road. 

Plus, having a lawyer do a lot of the work for you will give you peace of mind. You will know your claim is in the hands of a legal professional. This also frees you up to focus on your life and health after an accident.

Talk to a Savannah Personal Injury Lawyer

If you need help with your personal injury claim, don’t hesitate to talk with a Savannah personal injury attorney at our firm. Your attorney can discuss your case and goals during a free case assessment.

Ask us your questions and set your mind at ease. Reach out to The Nye Law Group by calling 912-417-5637 or fill out the contact form below.