Legal Question in Personal Injury in New York

Re: Do we pay taxes

Congratulations on winning the lawsuit. My best wishes on collecting the full amount on the judgment. I do debtor/creditor work and can help you with that issue.

Whether the judgment is taxable as income is a relatively simple question and the law is written plainly in the case Glascow Glass v. IRS. Compensation for injuries and emotional/physical damages is not taxable, all other judgments are. But only money you collect is taxed ( only "realized" income is taxable).

There are some exceptions and your attorney has helped write up the judgment to make it non-taxable. The IRS makes this a difficult task. Consulting an accountant can help, but I heavily, strongly, intensely recommend a TAX LAWYER for this task. In tax matters of this nature, a lawyer is what you want and NEED.

Although I have an MBA in Finance and am conversant on tax issues, I am not a tax attorney. This is a specialty.

You are welcome to a consultation for no fee at my offices at 42 West 44th Street, NY,NY. Please call for an appointment first. (646)591-5786 or (718) 729-2029

Re: Do we pay taxes

Not on a personal injury matter.

Re: Do we pay taxes

No...but whether you have to report it is another matter for your accountant to determine.

Good Luck

RRG

Re: Do we pay taxes

In short, probably not. Recoveries based on "pain and suffering" are not taxable. However, if any part of your recovery was specifically earmarked for "lost wages", the amount earmarked specifically for lost wages may be taxable.