Taxable or Not Taxable – Knowing More about Lawsuit Settlements for Mesothelioma Case
If you have found out that an aggressive disease like mesothelioma has diagnosed you, what are you going to do first? Almost everyone had learned that each person is given a limited time to live. There will come a day that you needed to bid goodbye to your friends and families and vanish here in this world.
Acceptance is hard, but maybe it is already your time to realize this uncertainty. Will you wait till that last day or will look for an explanation of why you have diagnosed with that disease? That is just reasonable especially if that disease is not upon your negligence.
As it is an aggressive disease, mesothelioma is a type of cancer that was caused by exposure to harmful materials. This harmful material is called asbestos and prolong exposure can cause you lung disease and worst, cancer. The exposure is from harmful asbestos products such as adhesives, paints, and others. If your company doesn’t inform or orient you about the risks that you will be facing on the work, then it is just fair that you file for a lawsuit against them. Be sure that before you file it, you have the necessary documents, your lawyer and of course to be knowledgeable to understand what you are facing now.
Are the lawsuit settlements for mesothelioma cases taxable?
Mesothelioma cases are given to have that complexity that separates it from other areas when talking about the law. With its complexity, it is only reasonable for you to seek legal assistance coming from the experienced law firm. They should specialize in managing cases such as mesothelioma case.
To answer that question – it depends. With the complexity of the case, the taxation for its settlement is quite complicated. The majority of these settlements are non-taxable. If you have filed for a personal injury lawsuit for your mesothelioma case, then yes, it is taxable. The compensation that you receive is taxable, but it will depend on the particular type of compensation that was given to you.
When it comes to financial compensation, plaintiffs who were the victims of the asbestos exposure are highly qualified for special and general damages. With this eligibility, you will not be asked to pay for an amount for taxes since these settlements are free of tax consequences.
This means that the amount that you will receive as compensation for medical expenses, emotional distress, personal injuries and even for the wrongful death lawsuit, this isn’t taxable. However, for other types of compensation that will be awarded to the victim after the lawsuit, it is taxable.
The Taxable Settlements
Depending on the lawsuit filed, if it falls under the personal injury case category, the person is mostly awarded both special and general damages that will serve as the compensation. With this, they don’t need to pay for the said taxes. However, sometimes the plaintiff may receive compensation is said to be taxable. To explain it further, here are the two types:
- Payment for the profit or lost wages – this compensation is awarded to pay for the lost profit or lost wages. If you were diagnosed with this type of cancer because of your exposure to asbestos on your work, then you need to include this payment in your taxes.
- Punitive Damages – this financial compensation is awarded to the victims to hold the company or the defendant to be liable for what had happened to you. Since it is due to their negligence, they would need to compensate you for the said damages. Is it taxable? Yes, it is. So, you need to declare this payment as a source of your income. Take note that in terms of wrongful death lawsuit, if this compensation is awarded to the family, it is non-taxable. This is done in some states.
If you are awarded compensation, make sure to identify what kind of it so that you will know whether you needed to pay for taxes or not.
Other Compensation Issues
When it comes to income tax, things can become complicated. If it is about the settlements, some factors needed to be considered before it can be declared as non-taxable. It depends on the jurisdiction where the compensation is being ordered and where the receiver lives, the merits and other circumstances.
Federal tax laws and state income tax laws vary. Each person should be wary of those essential things. There may be no specific rules regarding the compensation’s tax implications, but it is confusing. You need to distinguish whether it is a special or a general damages.
But at the end of the day, it will be decided mainly depending on the circumstances and facts presented.