If you’ve received a legal settlement or award, it’s important to grasp the tax implications. While compensation for physical injuries is typically tax-free, awards for lost wages, emotional distress and punitive damages are usually taxable. Even if your attorney is paid directly from the settlement, you may be taxed on the full amount. The way a settlement is structured can significantly affect your tax liability, making professional guidance essential. We can help you understand the rules, ensure proper reporting and potentially reduce your tax burden. Contact us to discuss how a court award or out-of-court settlement may affect your taxes.
