Facebook pixel

Are Plant City, FL Auto Accident Settlements Taxable?

In evaluating a Plant City auto accident settlement offer from an insurance company, our clients typically want to know how much from the settlement will be paid to the client.  Although each case is unique and needs to be evaluated based upon its own specific set of circumstances and facts, there are some general considerations that need to be taken into account in each settlement evaluation.


Generally, in analyzing a settlement offer for how much the client will receive, the client will need to understand the percentage of attorney fees, amount of legal costs in the case, amount of unpaid medical bills, and the amount of any health insurance or disability liens.  With the knowledge of the specific amounts of the aforementioned areas, a client can subtract those amounts from the settlement offer to calculate the amount of money that the client should anticipate to receive.


It is important to note that when making an auto accident settlement, the auto insurance company does not separate its settlement offer for the various types of damages of medical bills, lost wages, and pain and suffering.  Instead, the auto insurance company will make one global settlement offer without itemizing an amount for each element of damages.


Oftentimes clients will ask if their Plant City auto accident settlement is taxable.  Although each case is different and unique and a competent tax advisor should be consulted to answer specific questions, in general terms settlements for medical bills and pain and suffering damages are not taxable.  However, if the injured person incorporates lost wages or the loss of ability to earn future wages as part of his or her claim, it is likely the wage parts of the auto accident settlement are taxable.  The difficulty arises in that the auto insurance company does not itemize an amount for each element of damages, but instead makes one global offer for all damages.


If lost wages and loss of future earning capacity are part of your Plant City auto accident settlement, we recommend you contact us for a detailed review of your specific case facts.

Previous Post
Are Lutz, FL Personal Injury Settlements Public Record?
Next Post
How Long Does A Wesley Chapel, FL Auto Accident Take To Settle?