If you’ve received a monetary judgment following a personal injury case you might be wondering if you will need to pay taxes on that recovery. South Florida personal injury attorney Nelson Peña says in most cases the answer is no…
You shouldn’t be paying taxes unless you’re making a recovery that is income related such as lost wages or reduced-earning-capacity type of claim. If you’re making other types of claims like pain and suffering, loss of enjoyment of life, or anything that does not have a financial component, you should not be paying taxes on your recovery. It doesn’t matter whether the recovery is coming from an insurance company or a jury verdict, money awarded based on your personal injury is tax-exempt.
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