Do lawyers report a car accident insurance company settlement award on 1099 to the IRS?

Whether or not an attorney reports a car accident settlement on a 1099 depends upon what type of claim and settlement there is. Federal tax is only applicable if the settlement is to compensate for lost wages due to hospitalization and home care due to injuries sustained in the accident. If the settlement is for hospital bills, related medical expenses, vehicle-repair expenses, or home-care assistance then the settlement would not be taxable. If the settlement is greater than the actual loss, then you have a taxable gain and must file this on your taxes.

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