So I'm starting to look into the legal side of things and I keep seeing different information online about whether settlement money is taxable or not. My diagnosis is still pretty fresh (November) and I haven't filed anything yet, but I want to understand what I'm actually going to receive vs what might get taken out.
From what I've read, personal injury settlements are supposed to be non-taxable under federal law, but I'm seeing conflicting stuff about whether that applies to mesothelioma cases specifically or if there's some difference based on how the settlement gets structured. One source mentioned something about punitive damages being treated differently than compensatory damages?
I know I need to talk to a lawyer about this - I'm planning to consult with a few firms anyway - but I'd rather go into those conversations with at least a basic understanding instead of just nodding along. Has anyone here already gone through this process? Did your settlement end up being taxable at all, or was it handled the way the law supposedly says it should be?
Also curious if anyone worked with a CPA or tax person specifically for this stuff. Seems like it might be worth having someone who knows the ins and outs rather than just my regular tax preparer.