If you received a lawsuit settlement on a 1099-MISC, it should not be entered on a Schedule C. This income should flow to Other Income on your return.
Please follow the instructions below:
- Open or continue your return, if you're not already in it.
- Search for 1099-misc and select the Jump-to link.
- Edit your 1099-MISC.
- Continue past the amounts already entered.
- Describe the reason for this 1099-MISC as Lawsuit Settlement.
- Answer This Money Was From a Lawsuit Settlement on the screen Does one of these uncommon situations apply?
- Answer No, it was not back wages for the next question.
- Answer No for the question Did you have another 1099-MISC?
- Your 1099-MISC will flow to Other Income.
Next, please make sure to delete any Schedule C or associated self-employment forms in your return.
- Search for Schedule C with the magnifying glass tool on the top of the page.
- Select the Jump to Schedule C link in the search results.
- Select No to the question Did you have any self-employment income or expenses?
- Click on Tools.
- Click on Delete a Form.
- Scroll down to your forms and look for Schedule C and other self-employment forms created and click Delete.
@dennisgrove
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