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I don't believe it is correct to amend a past return for back pay. Income is taxed in the year it is paid, regardless of when it is earned. (And, since tax was not withheld at the time, even if it was proper to report the income by amending your 2013 tax return, you would owe 4-1/2 years of late fees and interest on top of the tax you owe.)
Yes, you can use Turbotax. Report the money as 2018 income on your 2018 tax return, since that's when it was actually paid. In a perfect world, you would receive a W-2 for the back pay part of the settlement, with payroll taxes (social security and medicare tax) deducted and accounted for, and you would get a 1099-INT or 1099-MISC for the interest. Simply enter both forms.
If you don't get a W-2, you can still use Turbotax. You would split the settlement between interest and wages, and for the wages part, you run through the W-2 section and then check a box for "I did not receive a W-2 but should have." You will pay an extra 7.65% social security and medicare tax, but you won't have to pay the full 15% self-employment tax on top of the income tax. The interest part is reported separately as interest income.
I don't believe it is correct to amend a past return for back pay. Income is taxed in the year it is paid, regardless of when it is earned. (And, since tax was not withheld at the time, even if it was proper to report the income by amending your 2013 tax return, you would owe 4-1/2 years of late fees and interest on top of the tax you owe.)
Yes, you can use Turbotax. Report the money as 2018 income on your 2018 tax return, since that's when it was actually paid. In a perfect world, you would receive a W-2 for the back pay part of the settlement, with payroll taxes (social security and medicare tax) deducted and accounted for, and you would get a 1099-INT or 1099-MISC for the interest. Simply enter both forms.
If you don't get a W-2, you can still use Turbotax. You would split the settlement between interest and wages, and for the wages part, you run through the W-2 section and then check a box for "I did not receive a W-2 but should have." You will pay an extra 7.65% social security and medicare tax, but you won't have to pay the full 15% self-employment tax on top of the income tax. The interest part is reported separately as interest income.
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