personal injury claim form on desk.

Tax Implications of Personal Injury Settlements

by Personal Injury Attorney

When it comes to personal injury settlements, it is important to understand the tax implications associated with them. Many individuals do not realize that when they receive a settlement from a personal injury lawsuit they can be responsible for taxes on that money. It is important to understand the tax implications of a personal injury settlement so that you can make the best decisions for yourself and your finances.

Taxable Awards

In general, most personal injury settlements are considered taxable income by the Internal Revenue Service (IRS). This means that you must report the settlement amount on your tax return and pay taxes on the money you receive. The only exceptions to this are if the settlement money is for medical expenses or punitive damages, which are not considered taxable income. In addition, any amount you receive for lost wages or other lost income is also taxable.

Calculating Your Taxable Amount

In order to calculate the amount of your settlement that is taxable, you must first subtract any medical expenses you incurred as a result of the injury from the total settlement amount. This will give you the amount that is taxable. For example, if you received a $50,000 settlement and had $10,000 in medical bills, the taxable amount would be $40,000.

Deductible Expenses

You may also be able to deduct certain expenses related to your personal injury settlement from your taxable income. This includes attorney’s fees, court costs, and any other expenses related to your lawsuit. The IRS allows you to deduct these expenses from your taxable income, so it is important to keep track of all of your expenses related to your personal injury settlement.

Reporting Your Settlement

When you receive a personal injury settlement, you must report it on your tax return. You can report the amount on Line 21 of your Form 1040. You should also include any deductible expenses you incurred related to the settlement on your tax return.

Tax Planning

It is important to plan ahead when it comes to taxes on a personal injury settlement. You may be able to reduce your taxable amount by having your attorney structure the settlement in such a way that more of the money is designated as compensation for medical expenses or lost wages. You should also make sure to keep track of all of your expenses related to the settlement so that you can take advantage of any deductions you are entitled to.

Learn More About Personal Injury Settlements

If you have any questions or concerns about the tax implications of a personal injury settlement, it is important to speak with a qualified attorney. At Kosto Injury Law in Boca Raton, we can answer any questions you have about the financial responsibility of a personal injury settlement and how it may affect your taxes. We can also provide you with the legal advice and representation you need to ensure that you receive the full amount of your settlement. Contact us today to learn more.

Woman holding neck after car accident

How To Win Your Personal Injury Case and Get the Right Compensation

by Blog

One of the most devastating situations you can find yourself in is suffering a personal injury due to someone else’s negligence. Whether this manifests in a car accident, slip-and-fall, product liability or any other type of accident, you have the right to hold the at-fault party liable. These tips can help your Florida personal injury claim be successful and get you the best compensation possible.

Document the Scene

Documenting the scene of your accident is crucial and gives you a slew of evidence to back up your personal injury lawsuit. Taking photos from all angles that show property damage, how the accident occurred and your physical injuries are always helpful. For example, if you were involved in a car accident, you would want to capture photos of your vehicle and any others, the road and skid marks, traffic and weather conditions and anything else that’s pertinent. There may even be a traffic or security camera that captured the accident as it occurred. Make sure to follow up and see if this indeed exists as it can serve as additional evidence.

Additionally, you should keep a journal and jot down notes of the events leading up to, during and immediately after the accident while everything is still fresh in your mind. Your personal injury attorney can use your account to your advantage in your case.

Get Witness Information

In many cases, there are witnesses to accidents. They can provide vital information to help strengthen your personal injury case. If there are any at the scene, get their names, contact information and statements. You can record them speaking or ask them to write down what they saw during the accident. If necessary, your personal injury lawyer can later contact witnesses to clarify their statements or ask them additional questions.

Seek Medical Attention

No matter how you feel immediately after a car accident, slip-and-fall or any other type of accident that was not your fault, you must seek medical attention. Some injuries remain hidden for a period of time, but then symptoms gradually appear. Medical attention gives you the chance to receive a diagnosis and treatment. It can also allow you to mitigate the severity of your injury.

Getting medical attention also gives you crucial evidence for your case in the form of your medical records and medical bills. Your personal injury attorney can better assess an appropriate compensation amount you should receive based on how much you have spent out of pocket on your medical expenses as well as your other damages such as lost wages, property damage and pain and suffering.

Avoid Talking to Insurance Adjusters

If your injury case requires you to go through an insurance company to recover damages, an adjuster might contact you and ask questions. They might even ask if they can record your statement. Don’t fall for this tactic; if someone from the insurance company wants to learn more about your case, your personal injury lawyer should be the one to speak with them.

With the right steps taken, your personal injury lawsuit can be successful and you can recover satisfactory compensation. If you were injured due to someone else’s negligence, contact Kosto Injury law at your earliest convenience to discuss your case.

Man holding injured arm

What Are the Steps Involved in a Personal Injury Lawsuit?

by Blog

If you’re considering filing a personal injury lawsuit, you should learn more about the procedure beforehand. Every personal accident case is different, but there are certain common litigation milestones you may anticipate meeting after you decide to bring a personal injury claim.

First Consultation

Your personal injury lawyer will meet with you at the initial appointment to examine the specifics of your personal accident case and answer any concerns you may have. After your initial session, your injury lawyer should give you an evaluation of your personal injury case and advise you on how to proceed depending on your individual requirements.

Investigation

Your personal injury attorney should investigate the details and circumstances surrounding your personal injury case. This investigation will frequently include the following:

• Documenting the crime scene

• Obtaining the accident reports

• Identifying all potential parties at blame and filing claims with their insurers

• Documenting medical bills and paperwork related to treatment for accident-related injuries

Treatment

While your personal injury lawyer is conducting the investigation and filing compensation claims, you should concentrate on recuperating from your injuries. To make a complete recovery and achieve maximal medical improvement, it is critical to adhere to your doctor’s advised course of therapy. 

While you are being treated, it is generally beneficial to keep a log of the hospitals and doctors you see, the out-of-pocket payments you spend, and the dates you were required to leave work to get treatment. This will ensure that your lawyer accounts for all potential damages and includes them in the Demand.

Demand Package

This explains the account of your personal accident case, including how the injuries happened, responsibility theory, and settlement demand. When your demand package is ready, your attorney will go through it with you to verify it is comprehensive. The demand is then forwarded to the insurance provider of the party to blame for your injuries, who will analyze it and determine the worth of your claim.

Negotiations

The insurance provider will usually respond with a settlement offer after reviewing the demand package. Your accident lawyer will tell you as soon as a settlement offer is made and will explore the many alternatives available to you based on their knowledge and experience dealing with hundreds of previous personal injury cases. However, you must eventually choose whether to take their offer, issue a counter-demand, or initiate a lawsuit.

Settlement

If your lawyer is able to reach a deal with the insurance company that fully and appropriately pays you for the injuries sustained, they will draft a settlement agreement explaining the details of the arrangement. Before signing the settlement deal, your lawyer should create a settlement memo detailing how the money will be distributed. While most personal accident cases may be successfully handled, a personal injury lawsuit may be necessary when insurance companies fail to recognize the full extent of your injuries.

Litigation

If negotiations with the at-fault party stall and your lawyer cannot come to a settlement agreement, the next step is normally to file a lawsuit, present your claim for injuries to a jury, and obtain a verdict against those responsible for your injuries.

Discussing your claim with a personal injury attorney might help you identify your legal alternatives. Your attorney will walk you through the claim process and inform you at every stage. Contact Kosto Injury Law to learn more about filing a personal accident claim.

Person with arm in cast

5 Situations Where You Need To Contact a Personal Injury Attorney

by Blog

Suffering a personal injury can be devastating and cause you great distress. If you were hurt due to the actions of someone else, you have a right to file a legal claim. These are five situations that warrant hiring a personal injury attorney.

Your Injuries Are Long-Term or Even Permanent

Long-term injuries make it necessary to hire a personal injury lawyer from Kosto Injury Law in South Florida. Whether or not your injuries are permanent means that you will have to go through extensive medical treatment and might need physical therapy or surgery and miss significant time off from work. Legal representation can help you hold the liable party responsible and ensure that you get the settlement you deserve.

Severe Injuries

In addition to the length of time of your injury, its severity can also impact your case. A personal injury lawyer will make it easier to handle such a complex situation. You might have medical bills amounting to the thousands or even tens of thousands of dollars range and need ongoing medical care costing even more money. A lawyer can help determine how much money your case is worth.

An Insurance Company Refuses to Pay

If an insurance company is responsible for reimbursing you for the accident that caused your injuries but refuses to pay, an attorney can help. Lawyers know how to deal with insurance companies to get the fairest amount possible for your personal injury lawsuit settlement. Where you might be given a lowball offer or refused one altogether, attorneys know the tactics used by insurers and won’t be swayed by them. Instead, they will fight to get you the best offer for your case.

They Are Objective

Personal injury attorneys are not only knowledgeable about how to handle your case, but they are also objective. This allows you to focus on recovering while they handle all the complex legwork of your case. Their objectivity can help your personal injury lawsuit because they can rationally negotiate on a settlement in your favor without making rash decisions. You can sit back and take care of your health without worrying about making the wrong decision.

Your Case Has to Go to Trial

Most personal injury claims reach a settlement. However, if one cannot be easily reached, your case has to go to trial and you need an attorney. A lawyer can expertly handle your case, which means you have a much better chance of the outcome being successful. This is often impossible if you represent yourself.

These are some of the best reasons to hire an attorney for your personal injury case. If you are in the South Florida area and need to contact a personal injury lawyer, contact Kosto Injury Law at your earliest convenience.