JERSEY CITY, N.J., April 15, 2019 /PRNewswire/ -- Legal-Bay LLC, The Pre Settlement Funding Company, announced today that the president recently backed a new law that would apply a tax to payouts of certain personal injury settlements. Previously, all personal injury settlement payouts were tax-free. But with the new law, certain damages will not be paid to the plaintiff without a good chunk of them given to Uncle Sam.
Legal-Bay is a leading personal injury pre-settlement advocate, and is known as one of the best lawsuit funding companies around. Legal-Bay also is a source of information for their clients when new laws can affect their settlement amounts or settlement values.
Chris Janish, CEO, commented on the changes, "Although Mr. Trump had an agenda to simplify the tax codes, this important change actually only further confuses things for plaintiffs who have suffered and now have to navigate through tricky tax consequences at a time when they have enough to deal with. We are disappointed by how these changes they will affect our clients, and need to ensure that they are aware so they don't get hit with a bigger tax bill later on."
You can fill out an application at Legal-Bay's website: http://lawsuitssettlementfunding.com or you may call our toll free hotline at: 877.571.0405
In most situations, you won't need to pay taxes on any physical personal injury settlement monies you are awarded. However, it's when you are granted damages for any emotional injuries you've sustained that the new tax law comes into play.
Compensatory damages are monies to reimburse a plaintiff for physical damages, injuries, or other quantifiable loss due to the negligence or unlawful conduct of the defendant. The new law will not affect the amount of taxes paid on these damages.
Punitive damages are additional monies awarded to a plaintiff when the defendant's behavior is found to be particularly harmful. Punitive damages are considered punishment and are typically awarded at the court's discretion. The new law will affect the amount of taxes paid on these damages.
THAT'S NOT ALL THERE IS TO IT, HOWEVER:
Obviously, the wording of your claim will be the most important distinction when filing for damages, as the changes under the Trump tax law are not quite so cut and dry. And determining which injuries are "physical" and which are "emotional" is puzzling, to say the least.
1. PERSONAL INJURY
Personal injury would include any physical harm to the plaintiff, including illness. Lawsuits for personal injury are filed when losses stemming from an accident or other incident where someone else's carelessness or intentional conduct caused the plaintiff to be injured. Cases that fall under the "personal injury" heading include slips and falls, motor vehicle accidents, medical malpractice, etc.
Any settlement payouts for these types of damages will remain tax-free.
2. EMOTIONAL PAIN AND SUFFERING FROM PHYSICAL INJURIES
The new tax law will apply if the plaintiff receives compensatory damages for any emotional distress that was inflicted through the personal injury. Personal injuries may have been caused by a traumatic event, and because of that, the emotional aftermath can severely affect a person's day to day life.
Any settlement payouts for these types of damages should remain tax-free.
3. EMOTIONAL DISTRESS
A victim of intentional or negligent actions caused by another person can sue for emotional distress. Emotional distress could be a life-altering situation that you believe was inflicted on you by another person or entity.
You can expect to pay taxes on any damages you may receive for emotional distress.
4. PHYSICAL SYMPTOMS FROM EMOTIONAL DISTRESS
Emotional distress on its own is not enough to avoid paying taxes on the damages you receive once the settlement goes through, and even physical symptoms such as insomnia, headaches, and stomach aches will merely be classified as emotional distress.
Any settlement payouts for these types of issues will most likely be taxed.
SO WHAT CAN I DO?
If you can make some sound investments over the next twelve months, maybe you'll be able to offset all the new taxes before it's time to file next year. The earlier you can get a jump on things, the better. If you're wondering how, please read on.
Did you know you could get your hands on some of your settlement money before your case is even decided? The arrangement is known as a pre-settlement cash advance, also known as lawsuit funding or case funding. Legal-Bay will be happy to speak with you about your options. They have an entire team of very skilled, very dedicated employees who will be able to offer all the details and answer any questions you may have.
If you are involved in a pending lawsuit and are looking for a cash advance now before your case settles, you can fill out an application at their website: http://lawsuitssettlementfunding.com or you may call their toll free hotline at: 877.571.0405 where agents are standing by.
All of Legal-Bay funding programs are risk-free and do not involve any out of pocket expenses upfront; you only pay if your case is successful. The non-recourse advance is not a lawsuit loan, lawsuit loans, settlement loan, settlement loans, pre-settlement loan, or pre-settlement loans.
Legal-Bay is committed to helping victims of car, truck or boat accidents, hospital or medical malpractice, pain and suffering, and specialize in lawsuit funding for plaintiffs in personal injury cases, including slip and fall, premise liability, product liability, faulty pharmaceutical drugs, as well as wrongful conviction or death, wrongful termination, sexual harassment/abuse or discrimination in workplace, and any civil cases where the plaintiff has already retained an attorney.
Disclaimer: Legal-Bay is not a tax advisory company. Nothing in the release should qualify as official tax information. Please seek professional tax help for a full understanding of any and all tax laws.
Chris Janish, CEO
SOURCE Legal-Bay LLC