Is an insurance settlement considered taxable income?

Is an insurance settlement considered taxable income? Wife was in an auto accident. Our attorney negotiated a small settlement with the insurance company. IRS claims we owe tax on the settlement because our attorney reported the settlement amount as nonemplyoyee compensation paid to us. I thought insurance settlements were nontaxabel income. Need help or the proper publication in the tax code to cite when I respond to the IRS. Thanks BEST ANSWER: Try this site where you can compare quotes from the best companies : Compare free insurance quotes RELATED: Can I get free health insurance? I just paroled out of prison. I don’t have a job yet. Is there… Read More

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I have medical insurance, why do I have to pay back medical expenses out of my auto accident settlement?

I have medical insurance, why do I have to pay back medical expenses out of my auto accident settlement? A drunk driver rear-ended me in 2006, I have medical insurance that I pay for through my job. When my attorney told me the driver didn’t have insurance I knew I was in trouble. My auto insurance paid part of my medical, I paid my co-pays and continued to go to the doctor/surgeons. When the attorney came to me and told me that I should settle because there was no more money I felt that I should so that I would not have to pay the firm anymore than was needed.… Read More

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