Is Financial Compensation Subject to Taxation?

Injuries caused by auto accidents, faulty products, or unsafe premises can create a difficult situation for you and your family. Not only can you suffer physical and emotional trauma, but you may also experience financial struggles due to medical bills, lost wages, and other damages. Fortunately, you can take legal action against the party at fault for your injuries to recover financial compensation to pay for these damages. However, one question many people have about financial compensation is whether it is taxable.

After having to pay medical bills and other expenses in the aftermath of a personal injury accident, paying taxes on your settlement may seem overwhelming. However, most financial compensation is not taxed. If you have questions about financial compensation in your personal injury case, contact an Oklahoma injury lawyer of the Abel Law Firm today at (405) 239-7046 and get started on building your case.

Tax-Exempt Compensation

In the majority of personal injury cases, the financial compensation that plaintiffs recover is exempt from taxation. This includes compensation to pay for the following:

  • Past and future medical bills
  • Prescription medication and rehabilitation costs
  • Pain and suffering or emotional trauma

While these damages are tax-exempt, there are some exceptions you should be aware of, such as compensation for lost income. Additionally, the interest that you may earn on your settlement is taxable along with punitive damages you may receive.

Contact Us

If you have been hurt in an accident caused by someone else, the negligent or careless individual at fault for your suffering may be obligated to cover your damages. To learn more about your legal options after a personal injury accident, contact an Oklahoma injury lawyer of the Abel Law Firm at (405) 239-7046.

Voted Oklahoma's Best Personal Injury Law Firm

Oklahomans across the state have recognized the Abel Law Firm's unique heritage as a statewide institution. Founded by Ed Abel, and today led by his son, Luke Abel, our personal injury law firm has become synonymous with empathy, compassion, and the highest professional performance serving our neighbors. Our family has sought to leave a profound impact upon the State of Oklahoma. We appreciate that former Governor Mary Fallin recognized that dedication when she declared May 1st "Ed Abel Day."

To be named Oklahoma's Best Personal Injury Law Firm is humbling. We are grateful to have won this prestigious honor. We work every day to earn the trust of those we serve: Oklahoma families who are facing some of the most difficulty days of their lives due to the negligence of others. It is our intention and resolve to continue to be deserving of the faith Oklahomans have placed in our family's law firm. Thank you!

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