Some parts of a motorcycle accident settlement may be taxed. The reimbursement victims receive for their lost time at work and motorcycle repair or replacement costs must usually be claimed on a tax return. Support the victim is awarded for medical bills, for physical pain, and for emotional trauma would not usually be taxed.
Motorcycle accident victims should seek professional guidance from a tax expert after receiving a collision settlement for the final word on what should go on a tax form.
What Part of a California Motorcycle Accident Settlement Check Can be Taxed?
After a frightening motorcycle accident, receiving settlement money from an auto insurer can be a hurt relief. Victims may have a stack of hospital bills to pay. They’ll likely need to catch up on normal monthly living costs like rent and utility bills that have built up while they’ve had to miss work and paychecks. But cashing that settlement check isn’t the end of the injured rider’s duty.
Parts of a settlement award or motorcycle accident court judgment are taxable. To figure out what is and isn’t taxable, you should trust the expertise of a California tax professional when you file your taxes.
This is a general idea of what parts of an accident settlement may be taxed by the State of California and the IRS.
What usually gets taxed in a motorcycle accident settlement:
- Settlement money received to replace income and benefits while an injury has kept you out of work.
- Property damage compensation, such as motorcycle repair or replacement costs. Money received to replace items damaged like a helmet and motorcycle clothing could also be subject to taxation.
- Money received for punitive damages. This is a less common form of compensation for California traffic accident victims. A judgment for punitive damages is assessed to punish a driver or a delivery or trucking company for extreme negligence. It is money that’s taken from the at-fault party as an extra penalty for their reckless, almost intentional behavior, that caused an accident. It’s meant to punish the guilty driver or business, but the victim of the accident would still receive the money paid for the fine. Any award received for punitive damages might be taxed.
What isn’t usually taxed in a motorcycle accident settlement:
- Compensation you receive to cover medical costs for an injury or a sickness suffered in a traffic collision.
- Compensation for the physical pain you’ve suffered and may continue to suffer.
- Compensation for the emotional trauma you’ve endured and may continue to have to cope with.
- Compensation for factors involving a loss of quality of life.
How Do I Know If I Need a California Motorcycle Accident Attorney After a Collision?
If your motorcycle accident involves property damage and/or only very minor injuries, you may not need the help of a lawyer for your case. Getting repairs reimbursed has become a standard process, and you should be able to get fair treatment on your own.
However, if your accident involves a more serious injury like a broken arm or a traumatic brain injury, and a careless driver is to blame, a lawyer can often win you much more than you would have won for yourself. When hospital bills grow, insurance companies seek ways to question your claim. Insurance adjusters are well known for wanting to pin the blame for accidents on motorcyclists, despite what an accident report says.
Your California Motorcycle Accident Lawyer serves as a protection against this shady attempt to limit the support injured riders are awarded. Your lawyer gathers the evidence necessary to fight back against insurance companies. Then your lawyer demands the most compensation for the injury possible on your behalf.
Contact a California Motorcycle Accident Lawyer After a Collision?
If you or a loved one has been seriously hurt by a driver’s mistake, contact Maison Law for a free, no-obligation consultation. It’s a no-risk way to find out what your injury is worth and what you should be holding an insurance company to.
If we can’t help improve the outcome of your case, we’ll tell you that and explain how to handle the case yourself. If you do feel we can help you earn more for your injury, there’s no need to worry about having the money to hire us. We work under a contingency agreement and don’t get paid unless we win your case. Then, the lawyer fee is paid out of the settlement check a car insurance company must provide to you.
