The amount you will receive in your Texas personal injury settlement is based entirely on the unique circumstances of your case. For example, a person who suffered severe, debilitating injuries will likely receive a larger settlement than a person who suffered moderate injuries because their damages carry more of a financial and emotional burden.
Another thing to consider when trying to determine what to expect from a personal injury settlement is insurance limits. Insurance policy limits may keep settlement offers low as an insurance company is unlikely to offer a settlement that is over the insured person’s policy limit. Typically, companies will have higher policy limits than individuals.
A. Is My Texas Personal Injury Settlement Taxable?
Whether or not your Texas personal injury settlement is subject to taxes depends on actions you took prior to your settlement.
According to the IRS, if you received a personal injury settlement for physical injuries or physical illness and DID NOT take an itemized deduction for the medical expenses related to the injury or illness in prior year, then the full amount of the settlement is non-taxable and does not need to be filed as income.
However, if you did deduct medical expenses during any prior year, you must include the portion of your settlement that is for medical expenses as income and that portion would be taxable.
Damages awarded for emotional distress or mental anguish are treated the same as physical injuries and physical illness by the IRS as long as they originated from a physical injury or physical illness.
Lost wages, on the other hand, are taxable and also subject to the social security wage base and social security and Medicare tax rates in effect in the year paid.
How to Prepare for a Free Case Review with a Texas Personal Injury Lawyer
When meeting with a Texas personal injury attorney for a free case review, there are things you can bring that will help the attorney evaluate your claim.
The first thing you will want to do is gather all the evidence that you collected related to accident or incident that caused your injuries. This may include:
- Photographs of the accident scene, damage to your car and other vehicles involved, your injuries, or anything else pertaining to the incident
- Copy of a police report or accident report
- List of names, phone numbers, or addresses of witnesses you spoke with at the scene
- Medical records
If you received any kind of medical attention after your accident, you should bring records or documents showing the procedures or treatments you had done in addition to the names and contact information of the doctors or medical professionals that saw you. Also bring documentation of any future treatment they have recommended and along with the expected costs of your continued care.
Other documents that you may have that you should bring to your first meeting with a lawyer include:
- Letters or emails you received from your insurer or the other driver’s insurer
- Name and phone number of the at-fault driver from the accident (and their insurance company’s information)
- Contact information of any insurance company or claims adjusters that you have spoken with
- Receipts of anything you purchased to remedy an injury or repair due to the accident
You may also want to prepare a list of questions for the attorney. Important questions to ask your prospective accident attorney include:
- How long have you been practicing law in this practice area?
- What is your track record of succeeding in these cases?
- Do you have trial experience?
- How much will it cost to hire you?