Maison Law Accident and Injury Lawyers of Fremont can guide you through the legal process after a car accident. The goal of any car accident claim is to reach a settlement to pay for your losses, but this also brings up other questions–like do you need to claim that money on your taxes? While we aren’t tax professionals, we can help you get the most out of your claim. Contact us today for a free consultation.
Do I Have to Claim My Car Accident Settlement on My Taxes?
Not surprisingly, getting a settlement in a car accident claim is a huge step toward getting better. This doesn’t just help you financially, but physically and mentally. But the fact is, most settlements come as a lump sum, which might raise tax issues for you. That said, not all parts of your settlement need to be reported to the IRS. Here’s how it works generally:
- Physical injuries – Money for medical bills, pain and suffering, emotional distress, and loss of quality of life is not considered taxable income, so you don’t have to report it.
- Income – If your settlement includes lost wages, car repair or replacement costs, or punitive damages, these may be taxable and should be reported as income.
While we work to get you a fair settlement, it’s always a good idea to check with your accountant to make sure you meet IRS requirements and avoid any tax issues. Our team can only help you with the legal side of things, but understanding the claims process is going to be important for you.
How Do You Get a Car Accident Settlement?
Legally, every car accident claim follows the same basic principle: the person or group responsible for the crash must pay for the damages. In most cases, this means the at-fault driver–like someone who rear-ended you or was distracted behind the wheel. Sometimes, other parties might share liability, but once responsibility is figured out, you can file a claim through:
- Filing an insurance claim out of court through the at-fault driver’s insurance company.
- Filing a personal injury lawsuit, where your case is decided by a judge, and potentially, a jury.
Your settlement covers the losses, or “damages,” caused by the accident, whether through an insurance settlement or a court verdict. These usually include things like:
- Medical expenses, which cover your current and future costs for treatment, rehabilitation, and medications.
- Lost wages for time missed at work and potential loss of future earnings.
- Property damage, which is the cost for repairing or replacing your car.
- Pain and suffering covering any physical pain and long-term discomfort.
- Emotional distress for any anxiety, PTSD, and other mental health impacts from the accident.
- Reduced quality of life, which covers costs associated with injuries that limit your ability to enjoy hobbies, work, or daily activities.
- In rare cases, extra financial support–called punitive damages–is meant to punish reckless or intentional misconduct. This often happens in cases where the other driver is under the influence or driving way over the speed limit.
Even with these damages available in a potential settlement, you still have to file within two years of the date of the accident.
How Can You Get the Most Out of Your Car Accident Settlement?
Getting a settlement is often the main reason for filing a car accident claim. But getting a fair settlement isn’t automatic–you need to prove your losses and take the right steps to maximize your claim. Here’s a few things that you can do to get the most out of your claim:
- Call 911 – If possible, move to a safe spot to avoid further danger. Then, call 911 for medical help. Paramedics will treat your injuries and take you to a hospital if needed.
- Wait for the police – Ask 911 to send the Fremont police or California Highway Patrol (CHP). Officers will secure the scene and create an official accident report, a key piece of evidence for your claim.
- Swap important information – Swap contact and insurance details with the other driver(s) involved. This will allow you to file your claim quicker.
- Document everything – Take pictures and videos of the accident scene, vehicle damage, injuries, and road conditions. This visual evidence can be crucial in proving your case.
- Keep important evidence – Hold onto damaged clothing, personal items, and medical records, as they help show the full extent of your losses.
- Be mindful of what you say – When speaking with police or insurance companies, stick to the facts and avoid admitting fault. Anything you say could be used to challenge your claim.
Taking these steps protects your safety, supports your claim, and improves your chances of getting the compensation you deserve. Our team is here to help you gather critical evidence and help you through the claims process, making sure your rights are protected and you get the maximum settlement possible.
How Our Lawyers Can Help After a Car Accident in Fremont
Once you’ve handled the immediate aftermath of a car accident, the next step is understanding your legal rights. Whether you need a lawyer depends on how serious your injuries are and the complexity of your case. At Maison Law Accident and Injury Lawyers of Fremont, we help by:
- Explaining your legal options so you understand the best path forward.
- Gathering evidence, like accident reports, medical records, and witness statements to bolster your claim.
- Negotiating with insurance companies to get you a fair settlement.
- Filing a lawsuit if the insurance company refuses to offer a reasonable settlement.
Dealing with the aftermath of a car accident can be overwhelming, but you don’t have to go through it alone. If you’ve been injured and want to explore your legal options, contact us today for a free consultation.