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Get your taxes done using TurboTax
I believe you are saying that I should report $500 on the 2024 return as income but no withholding amount. The tax software will determine that amount with the rest of my income to determine if I owe additional tax on that. Is my understanding correct? If yes, where do I report the income with no 1099-MISC?
I believe that they will include the $500 in 2025 1099 for the following reason;
Payment #1 I received $500 2024
Payment #2 I received 1404.65 2025
Withholding sent to IRS was 601.46
That totals 2506.11
Settlement administrator indicated 24% of the total settlement would be sent to IRS
2506.11-24% = 601.46. The only way they could have withheld the 601.46 would be using the total of 2506.11. That is why I think the 2025 1099 MISC will show a total income of 2506.11.
I have reached out to them for an answer.