AUTO INSURANCE SETTLEMENTS & Taxes

[MONA101]

I've been in a number a accidents over the past 10 years. I have received a total of around $6000+ in settlements. Am I supposed to claim this money on my taxes? If I did not, will I be penalized? Could I be charged and put in jail for this?

I am also currently going to court with one of the insurance companies because they are not paying all of my bills from my most recent accident. They are asking for my tax records now. Any advice on what I should do in this situation?

 

[stephenk]

Did any of the prior settlement money include payment for loss of earnings or loss of future earnings?

 

[MONA101]

No, none of the settlements were for loss of earnings or future earnings. They were just for medical bills and pain and suffering.

 

[weenor]

How are they asking? Interrogatories or just letters....Either you have asked for lost wages or they are anticipating that you will..that' why they want them.

No- compensatory damages are not taxable- punitive damages are.

 

[MONA101]

They are asking through interigatories- 30 pages, plus my taxes from the last 5 years. That's what made me think of the fact that I didn't claim my settlements on my taxes and made me worry that I would be fined. My lawyer told me that they are trying to find something that would discredit me. This was my only worry. I feel a bit better knowing that I won't get in to trouble for that. Thanks for the info all.