Unlawful discrimination claims. You can deduct certain attorney fees and court costs for unlawful discrimination claims, described earlier, on your Schedule 1 line 8 ... you will enter the total 1099 income and then make a separate entry for the attorney fees.
Reporting this in TurboTax will be a two-step process, first to include the 1099-MISC as income and then to make a negative adjustment to remove it.
To include the 1099-MISC as a part of your tax return, follow these steps:
- On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
- This opens a box where you can type in “1099-MISC” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
- The search results will give you an option to “Jump to 1099-MISC"
- Click on the blue “Jump to 1099-MISC” link
- Answer Yes you did receive a 1099-MISC
- Fill in the details from your 1099-MISC then click Continue
- Provide a short description for the reason you received the 1099-MISC then click Continue
- On the next screen titled, “Does one of these uncommon situation apply?” choose the last option, None of these apply and then click Continue
- On the next screen asking if the 1099 involved work like your main job, answer No and click Continue
- On the next screen, check the box that you received the income in 2019 and then click Continue
- Finally, choose “No, it didn’t involve an intent to earn money” and click Continue
- Answer the questions on the next couple of screens to finish the process
Now the income shown on the Form 1099-MISC has been added to your return. Next, it will be “removed” from the return.
Follow these steps:
- Go to Federal Taxes > Wages & Income and scroll to the bottom of the screen to the Less Common Income section (expand the section by clicking Show More if necessary)
- Click Start or Update beside Miscellaneous Income, 1099-A, 1099-C
- Scroll to the bottom of the list and click Start or Update beside Other Reportable income
- Answer Yes to move forward
- Enter a brief description, such as “settlement refund adjustment,” and the amount reported on the 1099-MISC as a negative number then click Continue
- Click Done
When you see your Form 1040 Schedule 1, the amount shown on the Form 1099-MISC will be reported twice on line 8 – once as a positive amount and once as a negative amount.
