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When you are injured in an accident in Denver, you are entitled to seek compensation for your damages through a personal injury claim. A personal injury claim requires you to provide evidence of your accident, your injury, and the financial losses you suffered as a result of the injury. The process can also require negotiation between your lawyer and the insurance provider handling the claim, which can lead to a settlement or may require you to go to court to have your case settled by a judge.
Once the claim is settled, you receive the agreed-upon compensation amount. You might think that this is the end of the personal injury claim process – but it is not. As the claimant, there is still more for you to consider, such as the tax implications of your settlement, any actions you need to take, and the laws applicable to your settlement.
How Will I Receive my Money
Most personal injury claimants receive their money in one large lump sum. But you can opt to receive it through a structured settlement, which means that the money is disbursed to you in installments. This option is generally popular with individuals who receive large settlements, such as settlements over $200,000. Talk to your lawyer about the advantages and disadvantages of lump sums and structured settlements.
Tax Requirements for your Settlement
Generally, personal injury settlements are not taxed. This is true at both the federal and the state level. However, they can be taxed in certain circumstances. If you deduct the compensation amount you receive on a tax return, you have to pay taxes on the compensation amount. If you receive interest on your compensation package, the interest may also be taxed. Compensation for lost wages is also taxable.
What Do I Do Next?
Once you sign a release to settle your claim, you waive your right to sue the defendant for damages you suffered as a result of the accident. After settling your case, your lawyer will use the money to pay your medical bills and reimburse any insurance money that must be reimbursed, then deduct his or her fees from the amount. Once all the deductions are taken out, you receive a check for your money.
Keep all records related to your claim because you might need them in the future, either as part of your medical record or because you need to pay taxes on the money you received. It is always important to have these records available in case you run into issues receiving installments of your money later or a tax dispute. If you chose to stay off social media while your claim was pending, you can return to it once the claim is settled.
Work with an Experienced Personal Injury Lawyer
For the guidance you need while your claim is pending and after, work with an experienced Denver personal injury lawyer. Your lawyer can advise you about what you need to do, what you need to avoid doing, and how to handle life after settling a personal injury claim.