Understanding Personal Injury Attorney Costs
How much does a personal injury lawyer cost in Charlotte? Suffering injuries because of negligence can leave you in pain and frustrated. The event may have caused medical bills to pile up, and you may have had to miss time from work. After a person’s careless actions caused you harm, you could have the legal right to recover compensation for damages in a personal injury claim. Many wonder how they will cover the legal costs until settlement.
Every case will have its own unique facts and circumstances. The good news is an experienced attorney at Edwards Injury Law will represent you on a contingency fee basis. This means that we will take our payment from the settlement after successfully proving your claim for damages. You will pay nothing up front, and there are no out-of-pocket expenses until our attorney demonstrates that the defendant was negligent and you recover damages.
Are Personal Injury Settlements Taxable?
The IRS does not apply taxes on personal injury claims after suffering injuries or illness. The same rule applies to lump-sum or periodic payments. Most settlements that happen because of carelessness will settle before the civil court. By and large, the money you receive from a personal injury claim in this state is not taxable. It is the same rule whether the plaintiff settles before going to trial or they receive an award for damages in civil court.
However, a portion of the settlement may be subject to taxes. The same taxation rule applies to all compensation for damages in a personal injury case. It covers award amounts for medical expenses for current and future care, emotional distress, inconvenience, and pain and suffering. Attorney fees are also not taxable as long as they recover the payment at a settlement that results from injury or illness. It is crucial to note that it is always in your best interest to seek advice from a tax attorney for your unique situation for questions concerning taxes. The small portion of a personal injury settlement that may be taxable in this state includes:
Compensation for the Loss of Income
The plaintiff must claim the compensation amounts the court awards for the loss of income. Depending on how they file their taxes, they may pay taxes on the portion of settlement they claim on their tax return. Further, if the plaintiff is a business owner and the defendant reimburses them for losing pay or business opportunities, that portion of the settlement is subject to taxation. In most cases, payment for lost profits should go on tax returns as business income. However, the best answer will come from a professional specializing in taxes. It is always a wise decision to speak with a tax attorney about questions on tax returns.
The Interest Some Personal Injury Claims is Taxable
Most personal injury settlements do not accrue interest. However, the plaintiff may settle the injury claim through the court system and receive interest on the judgment amount in some cases. The personal injury claim will accrue interest until the defendant pays the debt in those instances. There are state taxes on any interest the claimant receives as taxable income.
Special Rules for Medical Expenses
Compensation the court awards for medical expenses in a personal injury claim is not typically taxable except on rare occasions. A knowledgeable attorney at Edwards Injury Law can help explain all of your legal and financial options.
While the civil court rarely awards punitive damages in personal injury claims, if there is evidence of fraud or wanton conduct, the court may award this type of compensation which is intended to punish the negligent party. The state will tax punitive damages as taxable income.
How Edwards Injury Law Will Help Recover Damages in a Personal Injury Claim
If you need help to recover damages after an injury you sustained because of negligence, reach out to a skilled lawyer at Edwards Injury Law. You will not need to worry about coming up with legal costs because we will take a portion from the settlement after successfully settling with the insurance company at an amount you agree with or taking the claim to civil court. We are a black-owned and veteran-owned law firm fully committed to providing our clients with a positive experience. By working with Edwards Injury Law, you can have peace of mind knowing your injury claim is in excellent hands and will reach the best potential outcome. Contact us today.