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Is a Legal Settlement for Mesothelioma Taxable Income?

Individuals who have taken part in and won a mesothelioma lawsuit need to understand how the tax laws will affect the amount of money they actually received during the payout process. Several factors determine what amount is taxed and how much will eventually be turned back over to the government.

What Type of Injuries Are Exempt

Physical injuries or illnesses that are directly related to the workplace are exempt from taxation to an extent. Broken bones, mesothelioma, deep wounds, etc., will all qualify for tax-exempt status. Mental or emotional trauma, on the other hand, is not exempt and awards are taxed to a certain percentage.

Benefits of a Mesothelioma Settlement

There are two different types of awards that can be earned through a mesothelioma case. Trials are a high risk, high reward method that puts your fate in the hands of a jury that may not agree with your claim and may end up denying it. If they do agree with at least part of your claim, you will be reimbursed with only a fraction of what you deserve. On the other hand, taking a settlement will ensure that you are comfortable with the amount you receive. Your settlement may be less than what you would get with a trial verdict, but at least you will walk away with a guaranteed amount. Settlements eliminate the risk of the unknown.

Factors That Affect Mesothelioma Settlement Amounts

  • There are several factors that will have an impact on the amount you receive for your mesothelioma claim. Most of the factors will be financial in nature. They will include your lost wages and any medical expenses you may have incurred as a direct result of your condition. You may also be eligible for punitive and compensatory damage. Punitive damages are paid over and above the coverage of your medical needs. Sometimes referred to as “pain and suffering” damages, they are awarded according to how much your life has changed due to being injured. These damages are taxable according to the IRS. The percentage that is taken will depend on what portion of your total payout is deemed to be punitive.
  • The next factors have to do with how “at-fault” your company actually is. Negligence on behalf of your company will result in a much larger payout. If you received an injury or got an illness because you didn’t follow safety protocols, then your award could be taxed.
  • Other factors include how many companies are involved in your individual lawsuit. More than one company produces asbestos, so it stands to reason that multiple companies will be named in your case. The jurisdiction in which your case is heard may also play a role in your final award.

If you receive a large payout in a mesothelioma lawsuit, it’s in your best interest to discuss how much of your earnings are taxable. It’s important to have these answers so that you don’t overspend or take away money that will be needed for your healthcare in the future.

If you have questions about what may ultimately affect your mesothelioma award, contact our team of professionals at Gaylord & Nantais. Our attorneys specialize in workers’ compensation claims, including cases related to mesothelioma. Call and schedule the appointment today!

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Thomas M. Nantais

Thomas M. Nantais

Thomas M. Nantais is the Co- owner of Gaylord & Nantais, a legal firm specializing in workers’ compensation, in the state of California. This firm deals in getting hearing loss compensation and work related injuries compensation for those who have worked in the state of California. With his sincere efforts, Thomas is committed to meet the highest standards of the legal industry, and aims to provide the clients with an honest and aggressive representation.

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