Maison Law can walk you through the process of filing an injury claim and help you understand what to expect. If you’ve been in a car accident in Visalia, you might be wondering if the IRS needs to know about your settlement. While Maison Law isn’t a tax firm, we’ve helped many clients navigate the post-settlement phase. We’ll help you through the claims process and also help you understand what to expect. If you’re unsure about your next steps, we’re here to talk it through during a free consultation.
Will I Have to Report My Car Accident Settlement to the IRS?
Settling a car accident claim is supposed to bring peace of mind–you finally have money to cover the medical bills, lost time at work, and damage to your vehicle. But with that lump sum payment comes another question: do I have to pay taxes?Like many legal and tax questions, the answer depends. Here’s a basic breakdown of how settlement money is usually treated:
- Injuries and medical care – If part of your settlement is meant to cover physical injuries, treatment costs, or pain and suffering tied to those injuries, that portion is usually not considered taxable income.
- Lost income – If you missed work after your accident and were compensated for it, that portion is typically taxable. Since wages would’ve been taxed anyway, the IRS counts this as income.
- Vehicle damage – Settlement money that goes toward fixing or replacing your car generally isn’t taxed–unless you’re receiving more than what your vehicle was worth.
Every car accident case in Visalia is different, and so is every settlement. That’s why it’s a smart idea to run your final numbers by a CPA or tax professional–especially before tax season rolls around. It’s the best way to avoid unexpected headaches later. Again, though, this only happens after you make your way through the claims process itself.
What’s the Claims Process After a Car Accident in Visalia?
In California, car accident claims are built on a basic principle: if someone else caused the crash, they’re responsible for the damage. In most cases, that means the other driver (and their insurance), but sometimes it can involve others too—like an employer or even a vehicle manufacturer.
Once fault is sorted out, the next step is filing a claim. You can do this by:
- Filing an insurance claim
- Filing a personal injury lawsuit
From there, the process can vary. Some claims move quickly, others take time. But the settlement you’re offered is typically based on your “damages.” This is the legal term for everything the accident has cost you. These damages usually include:
- Medical bills that cover your ER visits, surgeries, follow-ups, medications, rehab, and more
- Lost wages that cover any paychecks you’ve missed while recovering
- Vehicle repairs or replacement costs, as well as damage to personal property
- Pain and suffering costs for your physical discomfort, limitations, or long-term effects
- Mental or emotional distress for any anxiety, depression, PTSD tied to the accident
- Loss of enjoyment of life covering costs relating to negative impacts to your hobbies, relationships, or daily routines
- Punitive damages, awarded in rare cases where the at-fault driver acted with extreme recklessness (like a DUI)
Also, remember: you only have two years from the date of your accident to file a claim in California. Miss that deadline, and your right to a settlement may be gone.
What Can I Do to Strengthen My Claim for Damages?
Even with the ability to file an injury claim after your car accident, you’re probably aware that you still need to do what you can to put together a strong claim. A strong claim–backed by evidence and documentation–is the best way to make sure you get what you’re owed. Here’s what you can do to make sure that happens:
- Get to safety and call 911 – No matter what the circumstances are around your car accident, your safety comes first. Even if you feel okay, call 911 for an ambulance and let paramedics check you out. Many injuries take time to show up.
- Talk to the police – Ask 911 to send the Visalia Police Department or CHP. A police report can be a major help later, especially when determining fault or sorting out insurance disputes.
- Take pictures and collect information – If you’re able, document everything: damage to your car, the other vehicle, the road, nearby signage, and anything else that shows what happened. Get names and numbers from witnesses, too.
- Track your expenses – This means keeping medical records, prescription receipts, physical therapy invoices, even gas mileage to your appointments. All of it helps tell the full story of what this accident has cost you.
- Be careful – Whether you’re talking to police, insurance reps, or even posting online, be cautious. Seemingly harmless comments can be used to challenge your claim. And as tempting as it is, avoid sharing details on social media.
If you’re seriously hurt and can’t handle all this right away, that’s okay. Our team can help gather the documentation you need–and make sure your claim is as complete and accurate as possible. That’s the key to getting a settlement that reflects your losses and is easier to deal with when tax time rolls around.
Contact Maison Law For Help After a Visalia Car Accident
A car accident in Visalia can leave you overwhelmed. Between medical bills, missed work, and confusing next steps, and while most people focus on the claim itself, few think about the tax impact of their settlement. At Maison Law, we walk you through it all–from filing your claim to understanding what happens after you get paid. We’ll:
- Help you figure out what parts of your settlement may be taxable
- Collect the documents you need to support your claim
- Deal with the insurance company on your behalf
- Go to court if needed
- Make sure you’re prepared come tax time
If you’re unsure about what to do next, we’re here to talk it through in a free consultation. Reach out today to set up yours.
