Is My Florida Personal Injury Settlement Taxable?

With only a couple of weeks remaining until the end of this year’s tax season, the Fort Lauderdale personal injury lawyers at our firm have been contacted by clients who are concerned about the tax implications on their personal injury settlements. They want to know if their personal injury settlement is taxable. In Florida, typically settlement awards are not taxable, however there are some exceptions and a settlement may subject to federal taxes depending upon the nature of the lawsuit and the type of damages the plaintiff was awarded in the settlement.

For example, punitive damages that are awarded in a Florida personal injury lawsuit are not excluded from federal income taxes, which mean that if you are awarded these kinds of damages in your lawsuit, you will be required to report this as income for taxing purposes. Punitive damages are those imposed against the defendant to punish him or her for the wrongful conduct they have committed against the plaintiff. The Internal Revenue Service (IRS) considers that this form of monetary compensation as a windfall for the plaintiff because the injured party was not compensated for factors such as lost wages or pain and suffering.

Further, our Fort Lauderdale accident injury attorneys recommend that clients seek the assistance from a tax attorney or certified public accountant (CPA) who can guide them in preparing their income tax returns to ensure that they are in complaint with the law. The tax laws governing personal injury settlements are very complex and the government often modifies the regulations so plaintiffs should not proceed in filing their tax returns on their own when these matters are present. However, as a general rule, compensation the plaintiff receives as a result of a physical injury or sickness is excluded from gross income calculations, but a tax attorney or CPA is in a position to further assist the client with how these matters should be treated on a federal income tax form.

In addition, damage awards based upon an emotional distress claims can further complicate matters because the IRS does not consider emotional distress itself as a physical injury or sickness. But if the award was to compensate the plaintiff for emotional pain that resulted from the physical injury or sickness, then this amount could be excluded from gross income. Yet, on the contrary emotional distress resulting from injury to reputation must be counted in the gross income calculation, unless the damages were awarded for medical care due to the emotional distress. Similarly where the damages awarded are from an employment discrimination case, there are specific federal, state and local laws which apply to the exclusion of gross income for tax purposes.

If you or a family member received a personal injury settlement and are worried about the tax implications affecting your awards, consult with a professional such as a CPA or tax attorney. Also, our Fort Lauderdale personal injury attorneys represents individuals and their family members who have been harmed or injured in a personal injury accident including a wrongful death, automobile negligence, slip-and-fall, dangerous drugs, or premise liability. If you have been hurt in any of these accidents, contact our office today to learn what legal options are available to you.

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Florida Personal Injury Lawsuits and Bankruptcy

Our Fort Lauderdalepersonal injury clients frequently have questions regarding how a potential bankruptcy filing could affect their motor vehicle, slip-and-fall, or medical malpractice lawsuit. The answer to these types of questions will depend upon a number of factors, including the type of bankruptcy protection a client is seeking from the bankruptcy courts. Typically, most clients file as consumers who request protection from the court by filing a Chapter 7 or 13 bankruptcy petition. Basically, consumers seek to liquidate their debts under Chapter 7 because they have no assets for the trustee to distribute to creditors, as compared to a Chapter 13. Under a Chapter 13, a payment plan is filed in the case in order to pay off creditors.

You will need to consult with your Fort Lauderdale personal injury lawyers about your concerns of an unresolved lawsuit and how a bankruptcy filing will affect your suit. Also, your attorney is likely to refer you to an attorney who practices bankruptcy law to represent you in your bankruptcy case. These matters can become very complicated because once a petition is filed, a bankruptcy trustee is appointed to administer your estate and you are required to list all property and assets you own.  And for bankruptcy purposes, any pending civil suits are considered as assets in which you own and must be listed in the bankruptcy schedules. Failing to disclose this information in your bankruptcy petition could result in a dismissal of your civil lawsuit to recover damages. Further, the trustee will determine whether or not the value of your pending lawsuit has a value which is worth administering. If the trustee determines that your pending claim has substantial value, then he or she will more than likely want to administer the personal injury case as an asset of the bankruptcy case.

But, before the trustee makes a decision to abandon its interest in a potential FortLauderdale personal injury suit, he or she will also consider any exemptions in which you are legally entitled to claim. Since bankruptcy is controlled by federal law, there are various federal exemptions in which you may claim to keep your property out of the hands of the bankruptcy trustee. For example, under Section 522 (d) (11) (b) of 11 U.S.C., a debtor (in this case, the plaintiff with a pending personal injury lawsuit) is allowed to exempt a payment on account of the wrongful death of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.  Also, there may be state exemptions under Florida law which will allow you to keep your property.

It is always best to speak with your Fort Lauderdale motor vehicle accident attorneys about any bankruptcy filing you may be contemplating once you have filed a cause of action based upon negligence, or any other areas of torts law. We know that when you or a loved one is seriously injured in a motor vehicle crash, a slip and fall accident, or harmed as a result of medical malpractice, you may face financial difficulties which arise as a result of the injury you sustained, and become unable to work. Consulting with an attorney can advise you of your legal rights and how to best handle your financial hardship.

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Man Killed In Motorcycle Crash, Florida Motorcycle Crash Accidents Decreased in 2010

The Broward County Sheriff’s office is asking anyone who witnessed or has information about the fatal motorcycle accident on Sunday along the 500 block of Dixie road at approximately 11:30 p.m. to contact their office. Peter Peco, a 63-year-old Lauderdale-by-Sea resident was killed when he lost control of his motorcycle and crashed it into a palm tree, according to a story in the Sun Sentinel. Sheriff investigators believe that Peco approached the intersection and struck the curb on the west side of the road which caused him and the motorcycle to thrust into a palm tree. He was later pronounced dead at the North Broward Medical Center.

First and foremost, our Fort Lauderdale motorcycle accident attorneys send our thoughts and condolences to the Peco family. We know that this tragic event can be an overwhelming and troubling time for the family. Unfortunately, this accident and those similar to this will now become a part of the Florida Motorcycle Crash statistics compiled by the Department of Florida Highway Safety and Motor Vehicle. But on a lighter note, in 2010, the overall incidences of motorcycle crashes dropped approximately 10 percent in the state of Florida. In 2009, there were 8,313 motorcycle crashes which occurred in the state, and the 2010 statistics revealed that during that year, there were 7,484 motorcycle accidents which occurred. Sadly, the number of motorcycle passengers increased in 2010 from 2009. In 2010, 33 motorcycle passengers were killed as compared to 26 in 2009.

It is not clear whether or not Peco was wearing a helmet at the time of the crash. Since under current Florida motorcycle law, persons over the age of 21 have the option to wear a helmet, provided they have an insurance policy for at least $10,000 in medical benefits. However, riders 21 years of age and under are required to wear a helmet. In spite of most riders being safe drivers, a Fort Lauderdale motorcycle accident can occur at any moment. Further, often these accidents occur due to the recklessness and carelessness of other drivers, thus causing motorcycle passengers to become seriously injured, or worst; death.

 Plainly, when a motorist operates a motor vehicle in a negligent or reckless manner he or she could face severe criminal consequences if someone is hurt or killed as a result of an accident. Also, a Fort Lauderdale personal injury lawsuit could be filed against that person to hold this responsible party liable for the damages an injured party has suffered due. When a driver is issued an operator’s license to operate a vehicle or motorcycle, they have given an implication to follow the rules of the road, including not driving in a carless and imprudent manner or to engage in unsafe conduct which they know will harm or injure others.

Our Fort Lauderdale accident attorneys help individuals who have been seriously injured or harm during a motorcycle or vehicle accident. We also help family members who have lost someone they love to recover damages as a result of a crash. It is always best to consult with an attorney shortly after an accident in order to become aware of your legal rights.

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