You still need to report your1099 MISC as taxable income for 2023 because it is a legal settlement and most be reported as such
- Sign in to TurboTax and open or continue your return.
- Search for 1099-misc and select the Jump to link.
- If you're asked Did you get a 1099-MISC?, answer Yes
- Enter the information from your 1099-MISC and select Continue.
- On the Describe the reason for this 1099-MISC screen,
enter lawsuit settlement and select Continue.
- On the Does one of these uncommon situations apply? screen, select This was money from a lawsuit settlement and then answer the back wages question before selecting Continue.
If this settlement resulted from an investment sale from a previous year, you will need to amend that year's return to reflect changes that were made in the settlement of the lawsuit by editing the sale entry for the investment made in that return.
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