Structured settlement annuities have their pros and cons. Overall, the federal tax rules that apply to them make them a good choice for anyone receiving a personal injury settlement. While you don’t get access to your settlement quickly, the slow payments can work in your favor as well.
If you find that your structured settlement takes too long to pay out, consider using structured settlement funding. You have options to get money fast, and Silver Dollar Financial makes it easy to do so while still retaining the benefits of your structured settlement. Call us today at (844) 871-0628 for more information.
A Brief History on Structured Settlement Annuities
The Periodic Payment Act of 1982 made structured settlement annuities a popular choice among personal injury victims. It incentivized the usage of structured settlements by allowing federal protections over them.
Since the passage of that act, structured settlements have become common throughout the years. Many people choose structured settlements over lump sums for various reasons.
Structured Settlement Annuities Are Tax-Free
Under federal tax rules outlined by the Periodic Payment Act and the Internal Revenue Code (IRC) §130, structured settlement annuities for personal injury are tax-free. You pay no taxes on any of the money you receive throughout the entire period you get paid.
Since structured settlement annuities are tax-free, many people use this benefit to their advantage after receiving compensation.
Financial Security with Structured Settlement Annuities
In combination with federal tax law stating that your structured settlement is tax-free, there are other benefits you can get as well.
Easy Budgeting and Management of Funds
When you get regular payments of your settlement, they are easier to manage. You can budget how you choose to use your settlement wisely. With a steady stream of tax-free income from your structured settlement, you will find that you can balance your financial obligations quite easily.
Safe and Secure
Most structured settlement payments are secure from others. Should you go through a divorce or have creditors seeking payment, no one can access the tax-free funds you receive from your structured settlement.
Additionally, your structured settlement is protected from market fluctuations. This means that even if the market goes down significantly, the payments you receive will continue to remain steady, allowing you to budget and plan your finances effectively.
Many people who suddenly come into wealth will often squander away all of their money within a couple of months. This effectively negates the hard work they put in to get the money they received in the first place. Think about lottery winners who win millions only to lose all of it in the span of five or six months.
People who win personal injury settlements are much the same. If you are concerned about your financial control, you can choose structured settlements as a tax-free way to prevent overspending. You can give yourself the discipline required to use your money wisely.
What Happens if I Need Money Fast?
Sometimes, an unexpected emergency can require you to pay more than what your structured settlement allows. If you need access to the rest of your settlement fast, then consider obtaining structured settlement funding.
With our structured settlement funding, you can receive a cash advance on your annuity. Instead of waiting for slow payments to trickle in, you can get the money you need quickly and avoid descending into a pitfall of debt.
Do the Tax Rules Change if I Get Funding?
Generally, no, there is no change. All you are doing is getting an advance. You get the money you need, and you pay us back with the regular payments you get from your structured settlement.
The tax rules only change if you decide to completely sell your structured settlement and the terms of the contract change. In that case, you may face some taxation. Every case is different, and you should talk to one of our financial advisors first before making any major decisions.
Silver Dollar Financial Is Here to Help
If you have questions about your structured settlement annuity, whether it be about:
- The federal tax rules
- How to get an advance on your settlement
- How to sell your settlement
Then reach out to our office today. We offer honest, transparent, and compassionate assistance to all personal injury victims before, during, or after settlement negotiations. Our team responds quickly to all inquiries and is standing by, ready to assist.
Call Us Today
You can reach our office at (844) 871-0628. We have helped hundreds of clients get the funding they need to get through hard times. With compassion, honesty, and empowerment as our core tenets, we hope to provide you with the answers to any financial questions that you may have.