Personal injury plaintiffs go through a lot. First, there’s the trauma of the accident and the injury itself. Then, there are the follow-up medical appointments, rehabilitation work, missed wages, and time spent talking to lawyers or the insurance company. Once we reach a settlement for our clients, we hope the worst of their worries will be over. But some have a new concern: Will their hard-earned compensation be taxed? Fortunately, in most cases, the answer is no. According to section 104(a)(2) of the Internal Revenue Service (IRS) code, settlement money is not taxable if it is paid “on account of physical injuries or sickness.” That means money paid out for medical bills, lost wages, physical impairment, disfigurement, and pain and suffering cannot be taxed. That’s good news because these factors account for virtually every case our firm handles. As with anything pertaining to our tax code, there are exceptions to the rule. In the rare instance that a person is not injured physically but suffers emotional injury only, the settlement can be subject to tax. Punitive damages are similarly uncommon, but they are also taxable. Punitive damages are only assessed in the most outrageous cases to punish the defendant for their egregious conduct; they are rarely a concern. Additionally, the IRS may tax payments made to ensure confidentiality. We can never guarantee any given settlement will not be taxed, but we believe each of our clients deserves their compensation and will do all we can to avoid taxation. For example, we are always careful with the language used in any settlement. We establish the compensation is for physical injuries or sickness suffered by the recipient. When the agreement includes a confidentiality clause, we generally specify that additional payment was not made in exchange for the confidentiality. Our attorneys and clients have found these steps sufficient to prevent tax obligations. At Harmonson Law Firm, our goal is to do right by all of our clients and avoid creating any additional burdens. While we hope this information puts your mind at ease, we are not tax attorneys. If you still have concerns, we urge you to seek the help of a tax professional with experience in personal injury settlements. TIME TO PAY THE PIPER? Personal Injury Settlements and Taxes
ND ILLEGAL CAN AFFECT YOUR CASE
But not all licensed drivers can operate a vehicle under all conditions. Many drivers are required to wear glasses or contact lenses, but other restrictions exist. For example, some drivers are prohibited from driving at night, on the expressway, or more than 45 mph. And drivers who behave recklessly behind the wheel can have their license revoked. When a client seeks our help in a car crash case, one of our first actions is to retrieve the other driver’s driving record. It will contain similar accidents in the driver’s past, previous violations, the history of their license status, and whether or not they could legally drive at the time of an accident. It will also provide details of any restrictions on their license. The value of a case can increase significantly when the at-fault driver has a suspended or revoked license, did not wear the required corrective lenses, or otherwise violated their license terms. All of these actions put other drivers at risk. When they do, we work to hold the irresponsible party accountable.
Sweet and Spicy BBQ Chicken Skewers Inspired by RecipeRunner.com
INGREDIENTS
For the Marinade •
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3/4 tsp smoked paprika
1 tbsp olive oil 2 tbsp soy sauce
1/2 tsp salt For the Skewers •
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2 tbsp chili garlic sauce
2 lbs chicken breast, cut into bite-size cubes 1 small pineapple, cut into 1-inch cubes
2 tbsp rice vinegar
3 tbsp honey Juice of 1 lime
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DIRECTIONS
1. In a bowl, whisk together marinade ingredients. 2. In a reusable freezer bag, combine cubed chicken and all but 1/4 cup of the marinade. 3. Seal bag and massage marinade into the chicken. Chill in the fridge overnight. 4. The following day, preheat the grill to 400 F. Thread chicken and pineapple onto skewers, adding two cubes of chicken for each cube of pineapple. 5. Grill the skewers for 3–4 minutes per side, brushing with the reserved marinade in the final minutes. 6. Serve over rice or with your favorite barbecue sides!
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