Are Lawsuit Settlements Taxable?

If your personal injury lawyer at a law firm in Coral Springs, FL, successfully negotiates a favorable lawsuit settlement on your behalf, you may have some questions about whether the money will be taxable. Unfortunately, as with most tax situations, the answer is not cut-and-dry. Your personal injury lawyer may refer your question to an accountant.

Watch this video or consult your attorney at law to learn more about taxable income pertaining to lawsuit settlements. You’ll learn that, in most cases, if you receive compensatory damages for a physical injury or illness, that money is not taxable. On the other hand, the punitive damages that may result from a jury award are considered taxable income. This video also discusses some of the situations in which your legal fees might be tax-deductible.