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Get your taxes done using TurboTax
To report the income:
- Enter the 1099-Misc in the Other Common Income section (Enter "1099misc" in the Search Box and Select "Jump to 1099misc")
- Indicate that it is a "Reimbursement for Damages", that it does not involve work like your main job, and that it did not involve an intent to make money, and is not a recurring payment (received in the past or expected in the future).
- The income will be reported on line 21 of your return.
To enter the expense:
- Go to Less Common Income, Miscellaneous Income and Other reportable income (enter "other reportable income" in the Search Box and Select "Jump to other reportable income")
- Continue to the screen "Other Taxable Income". Enter the description as "Cost of Damages" and the amount as a negative number. These are NOT wages.
A corresponding negative amount will be entered, and line 21 will be zero. See the attached screenshot example (different descriptions, but still offsetting).
‎June 6, 2019
11:13 AM