Gourley, Rehkemper & Lindholm

Awards & Taxes

Tax Implications to Personal Injury Awards

What are the tax implications on money paid to compensate me for my injuries resulting from a car accident?

Money Damages

The general rule of thumb is that monetary damages that are awarded either through a verdict or settlement negotiations that compensate an injured person for personal physical injuries or physical sickness are excludable from gross income. 

Monetary damages that are awarded either through a verdict or settlement for nonphysical injuries, such as employment discrimination or injury to ones reputation are taxable.  Additionally, awards for lost wages are taxable since had those wages been paid, the government would have received their cut at an earlier time.

Punitive Damages

Punitive damages which are not designed to compensate the individual for their injury but rather punish the defendant for reprehensible conduct do constitute taxable income.

Tax & Legal Advice

This is merely the general rule of thumb regarding tax implications of a personal injury award.  As always, consult with a competent and qualified attorney or an accountant for advice regarding your specific situation and award.

 

Des Moines Iowa Personal Injury Legal Team

The more severe the injuries from an accident, the more crucial it is to work with a legal team known to the insurance companies to be "ready to go to trial" on a claim. Gourley, Rehkemper & Lindholm's attorneys' long standing trial record is well known within the insurance industry. By placing your trust in our attorneys' hands, you can rest, reassured that you have done all that is possible to ensure the best possible outcome for your claim.

Gourley, Rehkemper & Lindholm's attorneys are available on call at 1-800-GRL LAWS (1-800-475-5297) 24 hours a day for emergency situations.

You can always ASK AN ATTORNEY at GRL Law, or SEND YOUR CASE INFORMATION in advance of your call so that we can review it as time permits before you call.

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GRL Law - Iowa

 
Contact Information

Gourley, Rehkemper & Lindholm PLC
303 Locust Street, Suite 200
Des Moines, Iowa 50309
515.226.0500 - 1.877.475.5297 (toll free)
Fax 244.2914 - E-mail - Map & Directions

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