Tax Season and Insurance Settlement

In Oct 07' I was involved in an auto accident on my way to work. I was going approx. 50 mph when I looked in my rear view mirror and noticed a car behind me and it seemed it wasn't slowing down. I stayed in my lane thinking he go around me but no luck with that. This gut drove directly into my rear end of my van. He hit me going at least 70-80 mph but amazingly not allot of damage to my van but his car was smashed. He had a small Toyota or Honda. After he hit me I just stood in my lane waiting to see if he was going to run but when he noticed me move to the side of the road he followed because his front end was falling off. I got out of my van walked to his car and asked him why when we are the only cars on the road did you decide to ram me. He wasn't alone in the car, his girlfriend the actual owner of the car was in the passenger seat. I'm thinking that she was giving him a job and he lost control of the vehicle. That is the only way I can explain not seeing my vehicle. My adrenaline was flowing and I didn't fell anything at that time but later in the day I started to fell my back tighten up. I contacted my doctor and he referred me to a rehab place. I called them and they also helped me retain the services of a lawyer to deal with the insurance people. The owner's insurance company called to see when I can get the van to the shop for an estimate of repair. Surprisingly, the cost was minimal about $1500 to repair. I started rehab on my back and that took almost 6 months to do. Well in late July 08' my lawyer called and said they want to settle out of court for $40,000 and I said that's fine, take it. Well, I really didn't get $40,000 because out of the settlement I had to pay the lawyer 33.3% which was $13,333.33 and the medical which was $14,400 and the rest was mine which was $11,564.25. I had to decide what I was going to do with it. I decided to take a trip to Brooklyn, New York for 2 weeks and stay with my sister and Dad, buy a car and get rid of my van which was $414.00 a month(Voluntary Repo). The car I got is way better on gas than the van. Bought clothes for my kids and gifts while on the trip. Bought a plane ticket for my eldest daughter but she never used and I lost $100 for putting that on hold. Well I didn't give a dime to the ex, I asked myself why should she benefit from my pain again. I had a good time with the settlement money but then after spending all that money I was like, How is this going to effect my taxes when tax time is here?. Well, I spoke to a tax professional and explain the situation and said don't worry because you don't have to claim it because is was to bring you back to before the injury and accident occured. So, that relieved alot of fear from my mind.