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PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4673
Experience:  35 years tax experience, including four years at a Big 4 firm.
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I live in Kansas and was involved in a car accident last summer.

Customer Question

I live in Kansas and was involved in a car accident last summer. The other drive was at fault and I am dealing with his insurance adjuster. I have been offered a settlement covering all my medical bills, and now it is time to finalize. I will be paid back wages and monies for pain and suffering.
My question is what part of the settlement is subject to taxation. Is if just the back wages and not the pain and suffering? This is my question.
Dan Ondracek
Submitted: 2 years ago.
Category: Tax
Expert:  PDtax replied 2 years ago.
Hi from just answer. I'mCustomer and can assist.
Expert:  PDtax replied 2 years ago.
Payments for pain and suffering are generally not taxable. payments for lost wages generally are.
Customer: replied 2 years ago.
I live in Kansas and was involved in a...
I live in Kansas and was involved in a car accident last summer. The other drive was at fault and I am dealing with his insurance adjuster. I have been offered a settlement covering all my medical bills, and now it is time to finalize. I will be paid back wages and monies for pain and suffering. My question is what part of the settlement is subject to taxation. Is if just the back wages and not the pain and suffering? This is my question.
Dan Ondracek
Customer: replied 2 years ago.
is that specific to the state of Kansas where I live?
Expert:  PDtax replied 2 years ago.
You can negotiate the amounts allocable to each in a settlement.
Customer: replied 2 years ago.
I was offered the option of a lump sum or over 25 years using annuitues, any thoughts
Expert:  PDtax replied 2 years ago.
Those rules are federal, applicable all over the us. I do not know of any states that tax these settlements differently for state tax purposes. Thanks for asking at just answer. Positive feedback is appreciated. I'mCustomer
Customer: replied 2 years ago.
thanks for your help, this is what I was wanting to know
Expert:  PDtax replied 2 years ago.
I'm not a fan of the annuity unless there is a good reason.
Expert:  PDtax replied 2 years ago.
You're welcome. Positive feedback closes out your question.