What are the Tax Consequences of a Personal Injury Settlement?

Right around the time of settlement, many clients ask me about the consequences their settlement will have on their taxes.

First, I am not a tax attorney nor an accountant, if you want specific tax advice, go see a qualified tax professional.  That said, generally speaking, personal injury settlements are not treated as taxable income.   There are several exceptions:

  • First, if you receive a separate check for lost wages, that money is taxable as if you earned it as wages.

  • Next, if the release contains a confidentiality provision – the IRS can treat a portion of the settlement as consideration for confidentiality and tax you on it.   The best bet is to make confidentiality mutual.

  • Finally, if you used medical bills that you paid to reduce your tax liability in a prior year and are now receiving money for those same bills, you will need to amend your prior taxes and pay any difference.

If you have questions about personal injury claims please contact Scott for a no cost, no obligation consultation and case evaluation.

The Power of a Story

The value of your claim can be greatly improved by telling a compelling story of how your injury impacted your life.

The power of a story – that is what the accident took from you – is much more useful than saying “in addition to the economic damages incurred, my client also sustained pain, suffering, emotional distress, as well as other harms and losses.”

Let’s face it, everyone is going to assume you suffered pain and inconvenience.   Saying that alone doesn’t move them.  But your story will.  Here is an example:

The story you tell should be meaningful to you – whatever it is.  Ideally, your story can be told through visuals – family photographs, ticket stubs, newspaper articles, anything – as well as people who can testify on your behalf. 

If you have questions about personal injury claims please contact Scott for a no cost, no obligation consultation and case evaluation.

How Much is My Case Worth?

The question “how much is my case worth” frequently asked and is quite difficult to answer in the early stages. It is practically impossible to predict the value of a case until all of the information has been collected and you have recovered or almost recovered from your injury.

There are many factors that determine the value of a case which include:

NATURE AND EXTENT OF INJURIES AND TREATMENT

  • “Soft tissue” injuries – strains, sprains, and back pains – are generally valued differently than fractures which are valued differently than catastrophic injuries or death.

  • Extent of the treatment that is necessary to treat the injuries

  • Whether there are any gaps in treatment or issues of non-compliance with order

  • Permanency of your injuries

 ECONOMIC DAMAGES

  • Medical bills, lost wages and other expenditures

  • And whether or not you’ll incur these in the future

 NON-ECONOMIC DAMAGES – the other harms and losses that you sustained but do not come with a price tag or receipt.

  • How bad did it hurt

  • How long did it hurt

  • How much did it interfere with your life

LIABILITY ANALYSIS: The extent of liability on the part of the potential defendant and whether there is any evidence that you caused or contributed in any way to your own injuries

INSURANCE AND COVERAGE: Which insurance company is involved in the case, is there coverage for the loss, and what is the limits of the policy.

If you have questions about personal injury claims please contact Scott for a no cost, no obligation consultation and case evaluation.

3 Types of Damages in a Personal Injury Case

Generally speaking – there are 3 types of damages – that you can recover in a personal injury lawsuit.

ECONOMIC DAMAGES (money damages) - includes past, present and future

  • Medical expenses

  • Lost wages

  • Property damage

  • Other expenditure you incurred as a result of your injury

NON-ECONOMIC DAMAGES – the other harms and losses that you sustained but do not come with a price tag or receipt.  

  • Pain and suffering

  • Mental anguish

  • Effect on personal relationships

  • Injuries impact your life

PUNITIVE DAMAGES may be awarded as a punishment and to discourage others from committing similar wrongful acts. Must show they acted:

  • state of mind characterized by hatred, ill will, or a spirit of revenge

  • a conscious disregard for the rights and safety of another person that has a great probability of causing substantial harm

If you have questions about personal injury claims please contact Scott for a no cost, no obligation consultation and case evaluation.

Am I Liable for Drunk Guests at My Party?

So you’re throwing a party this weekend, can you be held  liable for the actions of a drunk guest and the harm they cause themselves or to others?  

Generally speaking, in Ohio, social hosts are not responsible for the actions of intoxicated adults or the harm they cause to others.  However, social hosts are liable for the injuries to — and caused by — intoxicated minors.  This is true even if all you did was allow the party to be held at your house.  This is why they say “parents who hosts, lose the most.”

If you have questions about personal injury claims please contact Scott for a no cost, no obligation consultation and case evaluation.

Drive Safe This Holiday Season

“It’s not you that I worry about,” said my mom when I received my driver’s license, “it’s the other drivers that concern me.”   She is right.  To a great extent, every time we get behind the wheel of a car we are putting our safety (and lives) in the hands of thousands of other people we encounter driving on Ohio’s roadways.  Even the most cautious and careful driver can fall victim to someone else’s carelessness.  

As the holiday season is upon us, many of us will be traveling to spend time with friends and family throughout the country.  According to the Ohio Department of Public Safety, there were 36,392 motor vehicle accidents in the months of November and December last year; the majority of which – 29,678 – was in December.   And for 11,578 people, an accident resulted in some type of injury. 

So, what can we do to protect ourselves this holiday season? Simple, control what you can and, hopefully, others will too:

  1. Don’t drink and drive
  2. Don’t text and drive
  3. Don’t drive if you’re tired
  4. Maintain appropriate speeds and distances in inclement weather
  5. Report unsafe driving
  6. Wear your seat belt

Enjoy your holidays and I wish you safe travel!  

If you have been injured by the negligence of another, contact me for a no cost, no obligation consultation and case evaluation; I will fight for you. 

“Profit Over People” Prevails Again

             Unfortunately, in Simpkins v. Grace Brethren Church of Delaware, 2016-Ohio-8118 the principle of “profit over people” prevailed yet again.   If there was ever a set of facts to declare as unconstitutional the non-economic damages caps of R.C. 2315.18, this was the case. 

              In Simpkins, the plaintiff brought a lawsuit against a church for its pastor’s actions in forcing oral and vaginal intercourse with the plaintiff who, at the time of being raped, was 15 years old.   The jury found that the plaintiff was entitled to $3,651,378.85 in compensatory damages, which included the following: $1,378.85 for past economic damages, $150,000 for future economic damages, $1,500,000 for past noneconomic damages, and $2,000,000 for future noneconomic damages.   

              The trial court, in applying R.C. 2315.18(B)(2), reduced the plaintiff’s noneconomic damages from $3.5 million to $350,000 and, accordingly, entered a judgment in plaintiff’s favor for $500,000; which is $3.1 million dollars less than a jury of her peers awarded her.  So why did the court do that?

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Lawsuit Funding: A Horrible Idea

Personal injury and medical malpractice claims are advanced to help an individual who has been wronged or injured by the negligence or carelessness of another person to be compensated for their injuries.   That being said, personal injury and medical malpractice claims do not come with a blank check.   Liability is often disputed and can be difficult for a plaintiff to establish.   In fact, according to the most recent report from the Ohio Department of Insurance, roughly 75% of medical malpractice claims are resolved in favor of the doctors and hospitals.    

With statistics like this in mind, it easy to understand the allure of lawsuit funding: guaranteed money up-front and a promise that you can still recover money from pursing a lawsuit without any risk or obligation to repay the money back if you lose.   I guess that – not having to repay the advance if you lose – is what differentiates lawsuit funding from a loan from Bobby Baccalieri of The Sopranos.   However, make no bones about it: lawsuit funding is a horrible idea. 

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Crossing Outside the Crosswalk: Am I Barred from Recovering?

We’ve all done it before – especially anyone who frequents the Justice Center – crossing the street outside the crosswalk or in the crosswalk but when there is the “do not walk” signal.   Through my unofficial and unverified observations, 99% of the time it is done without incident.  However, what happens during the other 1% of the time?   Can the individual who was struck and injured recover for their loss?    My answer: it depends.

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Recovering for Injuries Sustained from a Dog Bite

According to the American Veterinary Medical Association, approximately 37% of American households – over 43 million – own a dog.   Most dog-owners (myself included) believe that our pets are harmless and would never bite anyone or anything.   However, that is not always the case.  I have represented many Ohioans who have been seriously injured by vicious attacks of a family dog.   Those who are fortunate, walk away with scratches or small puncture wounds.   Others’ injuries are more serious: permanent scarring, nerve damage, broken bones, loss of muscle tissue, or even loss of limbs.    

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