I was hit by a driver while I was a pedestrian. My left leg was totally shattered. It took 3 1/2 hours of surgery to fix it. I have a large plate and 11 screws in my leg. I am going to be coming into a very large cash settlement. Do I have to pay taxes on this money? If so at what tax rate is it taxed. Also can my attorney with hold the taxes before I receive the money? Thank you in advance for your answer to this question.:)

Do not believe there are any income taxes on personal injury settlements.

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Originally Posted by Totally Screwed

I was hit by a driver while I was a pedestrian. My left leg was totally shattered. It took 3 1/2 hours of surgery to fix it. I have a large plate and 11 screws in my leg. I am going to be coming into a very large cash settlement. Do I have to pay taxes on this money? If so at what tax rate is it taxed. Also can my attorney with hold the taxes before I receive the money? Thankyou in advance for your answer to this question.:)

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Your attorney should be answering all of these questions, but no, you don't pay taxes on personal injury verdicts/settlements. Your attorney may withhold a portion to cover any outstanding medical liens, etc.

The money you receive from any personal injury settlement is tax free. Out of this money you will need to satisfy your attorney's fee which is a percentage of your final settlement (this varies depending on the contract you signed with him when you retained him. It essentially changes percentage once the suit has been filed and he gets a larger cut of the pie. You didn't say if your case went to court or not), and any outstanding medical bill liens upon your case. It's what you do with that money, i.e. buy a car, then you would pay sales taxes on the car.

As Noted, there is no income tax on the money.

I will be awarded a large cash settlement from the avandia lawsuit. Will I have to pay taxes on this money and at what rate will it be. I live in memphis tn.

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Originally Posted by 01williams59

i will be awarded a large cash settlement from the avandia lawsuit. will i have to pay taxes on this money and at what rate will it be. i live in memphis tn.

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The rule in this site is this: if you have a new question, even if it seems to you that it is similar in nature to a previously asked question in another thread, please ask in in a new thread.

But for-your-information: the law hasn't changed since this question was answered in this thread more than four years ago. So no, you don't pay taxes on tort settlements.