How do I enter a 1099 Misc for an exact settlement that covered a medical expense if I do not itemize deductions? The medical expense was never used as a deduction.

A corporation paid for dental work done after a fall at their location. The check was for the exact amount paid to the dentist. I received a 1099 Misc with that amount in Box 7. I use the standard deduction so I cannot offset the "income" with a deduction. How do I handle the 1099 Misc?

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1 Best answer

New Member

May 31, 2019 9:49:48 PM

The settlement money is still considered income and you will have to pay taxes on it.

New Member

May 31, 2019 9:49:48 PM

The settlement money is still considered income and you will have to pay taxes on it.

Level 2

May 31, 2019 9:49:50 PM

That is clearly incorrect. IRS Pub 4345 states: "If you receive a settlement for personal physical injuries or physical sickness and did not take an itemized deduction for medical expenses related to the injury or sickness in prior years, the full amount is non-taxable. Do not include the settlement proceeds in your income." The question is: What do I do about the 1099 Misc?

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How do I enter a 1099 Misc for an exact settlement that covered a medical expense if I do not itemize deductions? The medical expense was never used as a deduction.