If you receive money from a lawsuit or settlement because of an injury, the last thing you want to do is pay taxes on this settlement.
And for once, the tax law helps you: there’s a generous tax exclusion available for awards and settlements in injury lawsuits.
But you must receive the money due to “physical injury or illness” to qualify for tax-free treatment. In this article, we explain what this means to you, when it does or doesn’t apply, and strategies you can use to minimize your overall tax bill if you receive an injury award or settlement. ... Log in to view full article.