turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

skyhype
New Member

2019 entries for settlement for back income

I received a settlement for back services as a contractor, but with no W2 or 1099-Misc from either the party that failed to pay in the proper year or my attorney.  Per the IRS pubs, since this was a recovery of income I should be able to allocate my attorney's fees as an expense on the recapture of those wages. but that the full settlement amount will be taxed as income.  I can see how to enter in TurboTax 2019 the data for the full settlement amount as miscellaneous income (please correct me if that's not how it should be entered).  But when I go to enter the associated expense, TurboTax blocks any such entry stating that for 2019 all legal settlement expenses are disallowed in the "Other Deductions and Credits - Legal Fees" category.  That seems to go against the "above the line" category of past income.  Where and how should the attorney's expense be allocated?

x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

3 Replies

2019 entries for settlement for back income

Had the debtor promptly paid you; how would you have entered it into your tax return?

skyhype
New Member

2019 entries for settlement for back income

It would have been reported as business income presumably if payment had been made on time.

2019 entries for settlement for back income

"It would have been reported as business income presumably if payment had been made on time. "

You have answered question.   It is business income reported on Schedule C ,  a little late and a little trimmed by the deductible lawyer fee.

Unlock tailored help options in your account.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question