Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
brittymae95
New Member

I was in a car wreck in 2018 & filed a claim with a lawyer because I wasn’t being compensated enough without having a lawyer... in 2019 I received a settlement for pain and suffering, do I need t

 
3 Replies
AlexanderS08
Expert Alumni

I was in a car wreck in 2018 & filed a claim with a lawyer because I wasn’t being compensated enough without having a lawyer... in 2019 I received a settlement for pain and suffering, do I need t

You do not need to report the income on your taxes.  As long as you did not claim a deduction for any medical expenses related to the injuries that you received the settlement on, the entire settlement is tax-free.

 

If you did claim a medical expense deduction for the expenses that you were later reimbursed for through the settlement, then you need to include the settlement income to the extent you deducted medical expenses.

 

If you need to pick up income because you deducted medical expenses then, From the Federal section select "Wages & Income."

 

Then, navigate to "Other Common Income" if you received a 1099-MISC.

 

If you did not receive a 1099-MISC, navigate to "Less Common Income" and select "Miscellaneous Income, 1099-A, 1099-C." Enter any taxable settlement proceeds there.

 

IRS Publication 4345 provides the most detailed information on the topic.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
mwy23
Level 1

I was in a car wreck in 2018 & filed a claim with a lawyer because I wasn’t being compensated enough without having a lawyer... in 2019 I received a settlement for pain and suffering, do I need t

Just to clarify, if I received a 1099-misc for a settlement on pain and suffering and no previous medial expenses related to the injury were deducted, am I supposed to simply ignore the 1099-misc and not report it on TT?

DMarkM1
Expert Alumni

I was in a car wreck in 2018 & filed a claim with a lawyer because I wasn’t being compensated enough without having a lawyer... in 2019 I received a settlement for pain and suffering, do I need t

Yes, ignore the 1099-Misc if the "pain and suffering" is from the physical injury.  Here is the link to the applicable IRS discussion. If it did not stem from the injury then here is link with instructions on how to enter in TurboTax.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Dynamic AdsDynamic Ads
Privacy Settings
v