Is my financial compensation subject to taxation?

If you successfully recover financial compensation following a personal injury lawsuit, it is important to understand your legal responsibilities in terms of paying taxes on this remuneration. Fortunately, the IRS does not count compensatory damages as taxable because they meant to reimburse you for costs you have already incurred. On the other hand, financial compensation specifically for lost wages and punitive damages is subject to taxation, as is any interest your money earns while in the bank.

If you have any questions about your right to compensation following a personal injury accident, we may be able to explain your legal rights and options. For more information, contact the Dallas personal injury lawyers of the Law Offices of Mark T. Lassiter today at (214) 457-1668.

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