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J
Jim

May 13th

Before you use the rest, be sure you understand your income tax situation. Portions of a settlement can be taxable income, and a large settlement could even push you into a higher tax bracket. This is worth discussing with your CPA or lawyer if you have not already. After that, consider setting aside a healthy emergency fund to avoid future debt for the next car, roof replacement, HVAC replacement, job loss etc. With those immediate concerns addressed, then focus on saving for a long term goal such as retirement, especially if you have employer plans that match contributions.
M
MWCoachIvan

May 14th

Hello ASL - from this IRS resource link it would seem your payment received due to an auto accident are not taxable - unless perhaps you itemized and deducted medical expenses on a previous year's tax filing. When accident, damage settlements become taxable when it is above and beyond actual damages - injury and you are awarded punitive damages - then those become taxable. I still would not hurt to run this past your accountant. Here is that IRS link: https://www.irs.gov/government-entities/tax-implications-of-settlements-and-judgments
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