Damages awarded to a plaintiff for pain and suffering endured as a result of an accident are tax-free. This is due to the fact that this type of award is not linked with income. Therefore, recoveries in most accident cases are tax free. These recoveries do not have to be reported to the IRS. If the settlement had been divided into medical or wage losses specifically, it might cause a taxable consequence. This is why all cases settle for a lump sum.

If you've been injured, speak to an experienced personal injury attorney lawyer. Not only can an attorney fight for you to win damages, but can also protect your interests in how damages are allocated for tax purposes. Contact the Law Offices of Brookman & Talbot to speak to an expert. They will give you a free consultation to assess the merits of your claim and represent you on a contingency basis.