ToddL
New Member

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).

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