Failing to Recognize Taxes

You’ve finally finished dealing with the court on your personal injury case, but you get the check and it’s less than you were told before! The problem is, your lawyer says, that they didn’t take taxes into account!

When dealing with a legal issue that’s not primarily about taxes, a lawyer has to tell the client about the issue of taxes, and has to take them into account. Not doing so is a form of legal malpractice.

In the case of a personal injury case, it’s always a good idea to keep these thoughts in mind:

• money received for personal injuries or physical sickness is generally tax-free
• Money received for economic loss, lost wages and benefits is generally taxable
• Money received for punitive damages is fully taxable.
• Money received for interest is fully taxable.

It’s the lawyer’s responsibility to take into account all of the possible implications and consequences of taxes.

For more information and advice, go to https://www.guralnicklegal.com/legal-malpractice-lawyer/ or 1-800-337-2900.