In our previous blog posts we discussed what happens after your car accident. We mentioned that lawyers of both sides will do a deposition to take statements from you, from the at-fault driver, witnesses and medical examiners. Then those depositions get transcribed and reviewed by the lawyers. So what’s next?What comes after car accident deposition – Part 2


Once both sides have their depositions, it’s possible that there will be a trial, if of course both sides feel that they have a solid case.

Going to trail isn’t something to be taken easily. It’s a big decision that you need to discuss with your personal injury lawyer. Your attorney should be honest with you and tell you what are your chances if the case does go to trial and what are the good and bad sides of it.

The reason why this needs to be considered carefully is because a trial can be an expensive and time-consuming process. But if a trial is what it will take for you to get the best out of your recovery and not pay anything out of your own pocket, then your personal injury lawyer will be there to help you and guide you through the process.

Negotiations with the other side will keep on going, but your lawyer will also dedicate a significant amount of effort to prepare for a trial that should give you the best chances for success.


A settlement is something that can occur at any stage of the process. Reaching a settlement is actually beneficial for all parties involved, but you should only settle if the offer you get is what you want.

If you’re not the cause of the accident and you have no part in the injuries, then you should have the obligation to bare any costs for your recovery. The goal of your personal injury lawyer is to get you every dollar you deserve.

Once a sides presents a settlement offer you will have to discuss it with your attorney. Your attorney will give you his honest opinion and whether he thinks that the offer is fair or not. The final decision on accepting or refusing the settlement offer is entirely up to you.

Accepting a settlement offer means that your case will be closed and you probably won’t be able to file another claim for this particular accident. Since this closes the loop on your car accident case it really important to carefully review the settlement offer and make sure that it covers everything you will need for a full recovery. When it comes to settlement offers, you should know that they should cover:

  • Medical bills, both present and future
  • Pain and suffering
  • Emotional distress
  • Lost wages
  • Lost earning potential
  • Rehabilitation costs

The recovery process could be long, depending on how severe your injuries were. If the recovery process is longer, then you will need extended hospital stays, even more than one surgery which means that you will be away from work for quite a while. It is also possible that you might not return to work in the same capacity as before.

Accepting this can be difficult, especially if we take into consideration that this might result in financial difficulties, stress and problems for your family. So working closely with your attorney who is fully aware of your needs and how those injuries might affect you in the long run is key. He will be able to closely determine the settlement that will compensate you.

Brain damages caused by a car accident can sometimes affect you for the rest of your life which means that there will be recurring costs aside from the initial treatment. These recurring costs might include prescriptions, returning visits to the doctor, therapy and rehabilitation.

Avoiding car accident trial

After a car accident, the most important thing is to focus on your physical recovery. Trials can be added unnecessary stress that you don’t really need. And even though settlements are a relatively quick and good solution to a car accident case, sometimes a trial is necessary because the at-fault party is refusing to offer a fair settlement.

Settlements are reached before the case goes to jury trial in almost all cases.  If the agreement is reached, your attorney will inform defending attorney that you have agreed to the settlement either by phone, letter or some combined methods.

Personal Injury settlements are not taxed by the federal government, or by the state if the proceeds are for personal injury claims. As a result of personal injury, any damage is excluded from federal tax law. The cases where only receive compensation for personal injury, the proceeds are not taxed.

Some of the following examples of damages:

Lost wages

Physical Pain

Medical Bills

Emotional Suffering

Attorney fees

Some of the above are direct examples of the injury that you sustained, and any compensation you receive will not be eligible for taxation.

For example, if you find yourself in a car accident and you sustain injuries that require medical treatment, your bills, emotional suffering, inability to work, wages lost and attorney fees will be compensated for as a result of your physical injury without any tax.


Most of the personal injury is non-taxable, but there are some specific cases where your settlement would be taxed- when a breach of contract is involved. If you breach the agreement, you would be responsible for paying taxes on the damages relating to the breach of contract so long as the offense is the basis of the lawsuit.

Punitive damages are taxed. By definition, compensatory damages are to equal the amount of pain and suffering you sustained.Punitive damages are those awarded to plaintiffs when compensatory damages are ruled an inadequate remedy for the defendant’s actions.

In most situations, compensatory damages are calculated based off of actual costs (medical bills, lost wages, etc.)Punitive damages are meant to turn aside the defendant from engaging in conduct similar to that on which the lawsuit is based. A reasonable attorney will request the verdicts to be separated into punitive (taxable) and compensatory (non-taxable), making it easier to distinguish what settlements you owe taxes on.

Emotional Injuries

Emotional damages are eligible for taxation cause personal physical injuries are non-taxable. Because of this, it’s important to disclose any physical injuries that you endured during an accident. Emotional wounds are not tax exempt.

Contact the Professionals

Settlements and going to court can take a lot of time and energy. In the current world of disinformation, it’s always imperative to have professionals by your side. You need a thorough investigation of any case before you can make a settlement.

Money that is obtained as compensation in settlement (or verdict) of a personal injury claim is not taxable as income under the federal code.

Each state’s tax laws may be different, although many States follow the federal guideline on this point.

Schenk Podolsky Attorneys at law office can help you with Injury claims and vast areas of practice.

Our client comes first. You can try our free consultation service

We have a different approach to every case. Remember, health comes first!