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Question
Do you know if I would have to claim any settlements I received this year on my taxes being it was a medical settlement. The settlement was for just under $22,000 and I don't want to end up owing money by not claiming it on my taxes
Answer

Great question! If your settlement is due to to physical injury or sickness, it is tax-free and does not need to be reported.

If any portion of your settlement was for lost wages, that will need to be reported and taxed. Your settlement documents should indicate what category the payment falls into, and it could be split. Some of the settlement might be taxable and a portion might be tax-free. I would check with a tax professional.

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Answer

Great question! If your settlement is due to to physical injury or sickness, it is tax-free and does not need to be reported.

If any portion of your settlement was for lost wages, that will need to be reported and taxed. Your settlement documents should indicate what category the payment falls into, and it could be split. Some of the settlement might be taxable and a portion might be tax-free. I would check with a tax professional.

No answer given yet!

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