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Do I Have to Pay Taxes on my Bike Accident Settlement?

I got doored by an oblivious driver. Thankfully I just bruised my leg, but it busted my bike pretty badly. Anyways, I’m about to receive some cash from the driver’s insurance company that’ll cover the x-ray bills and then some. Do I have to pay taxes on it?

(Photo: Steve Heap/
bike accident compensation taxes bike accident cycling accident car accident

Generally speaking, nope,

“Federal taxes are assigned to income, and when you receive a settlement, you’re being put back to where you were before” the accident, says renown cycling lawyer Bob Mionske.

In your case, the money you’re getting is an attempt to right the wrong that driver did to you when he whacked you with a car door. That wrong can include pain and suffering, medical expenses (x-ray bills), property damage (beat up bike), and lost wages. Generally, the only part of your settlement that could be taxed is money paid for lost wages, because you would’ve earned those wages if the accident hadn’t occurred, and you would’ve been taxed on them. But considering you just got bruised, you probably didn’t miss work because of the accident, unless you’re a leg model.

“A smart lawyer will make sure everything’s done in pain and suffering [related to physical injury], and repayment for property damage and medical bills—none of that is taxable,” Mionske says. Who are we to judge if your pain and suffering was valued near the MSRP of a Cervélo S5?

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Filed To: BikingInjury PreventionRecovery
Lead Photo: Steve Heap/