@iturman wrote:
Thanks for your response.
the Law Suit settlement was for back unpaid wages and was part of a class action lawsuit.
the documents received were a W-2 and a 1099-Misc. The W-2 shows Gross Wages and all the applicable taxes that were withheld. The 1099-MISC amount is shown in Box 3. the Gross Wages and the Misc Income are 2 completely different amounts.
Turbo Tax is classifying the Wages amount as Income from Self Employment and generating form Schedule SE with the Gross Wages Amount from the W-2 shown on Line 2 "Net Profit from Schedule C and Schedule K-1", neither of which have been generated. The system then generates a Self Employment Tax Amount that is shown on Line 16 of the 1040.
How can it be both W-2 back Wages Income and Net Profit from Self employment??
I don't understand your answer. Enter the W-2 on the W-2 page, it should already have taxes taken out (at least box 4 and 6, maybe not box 1, but that's ok). The wages from box 1 of the W-2 should never show up on schedule SE.
For your 1099-MISC with income in box 3, what does this money represent? You may need to contact the attorneys in the settlement. Is it wages? Is it some other kind of compensation? Is it a duplicate of the W-2 that should not have been issued?
Assuming the 1099-MISC is for part of the settlement that is taxable but not wages, you would enter the 1099-MISC as is, but answer all the testing questions "no" (not intended to earn a profit, not similar to my regular job, etc.)
