The 1099 form shows no taxes but I have a W2 which includes part of the settlement which shows taxes were taken out of part of the settlement. How do I rectify the two?
It's not clear if the W-2 amount is duplicated on the 099-Misc or you'r just saying part was reported on a W-2 amd part on the 1099-misc.
If the latter, just enter the W-2 and 1099-misc, separately at their different entry places in TurboTax. The withholding on the W-2 will eventually be applied to your total income.
The 1099 had the total amount of the settlement with no taxes withheld the W2 showed the back wages part and the taxes that were withheld. Should the back wages part be subtracted from the 1099?
Yes, which means you're going to have a problem with the IRS when your tax return doesn't natch the copy of the 1099-misc they get.
If you received an erroneous 1099-Misc
You have several choices:
1. Ideally, you get a corrected 1099-misc from the payer
2. Don't report it on your return. Attach a copy of the 1099 and a statement explaining the circumstances. You can't e-file. From the IRS instructions for form 1099-Misc: Form 1099-MISC incorrect? If this form is incorrect or has been issued in error, contact the payer. If you cannot get this form corrected, attach an explanation to your tax return and report your income correctly.
3. If the income is in box 7 of the 1099-Misc, Report the Income on schedule C and take a deduction under other expenses, call it something like "duplicate amount reported on W-2"
4. If the income is in box 3 of the 1099-Misc, report the income as misc line 21 income (enter in TurboTax at the 1099-Misc screen) . Then enter a line 21 deduction, for the same amount. In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
- “I’ll choose what I work on” Button
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other reportable income - Enter the number with a minus sign (-) in front. Briefly explain at description.
Hello,
I am curious if you had any issues when you reported it this way on your taxes? Did they accept your return? I am having the same exact issue with my 1099-MISC and plan on doing this. I just wondered if you came across any delays with your return when you had to do this?