I had a legal settlement of $ 2500 and I received 1099-Misc form for it. But the actual cash settlement, less the "expenses" was around $ 250. How should I report this?
I didn't generate a profit and the $2500 increases my tax bill. How can report the expenses to reduce my tax owed?
04426
1 Best answer
Bsch4477
Level 15
Jun 4, 2019 10:43:28 PM
There may be a better way, but one work around would be to enter the 1099-misc again with a negative amount in box 3 reflecting your expenses. If an explanation is allowed enter “expense offset for 1099-misc.”
4 Replies
Bsch4477
Level 15
Jun 4, 2019 10:43:05 PM
In what box in the 1099 was the amount?
Lisa995
Alumni
Jun 4, 2019 10:43:07 PM
what kind of settlement?
Hammer42
New Member
Jun 4, 2019 10:43:08 PM
The amount was in box 3; the legal settlement was for nuisance calls to my cell phone...
Bsch4477
Level 15
Jun 4, 2019 10:43:28 PM
There may be a better way, but one work around would be to enter the 1099-misc again with a negative amount in box 3 reflecting your expenses. If an explanation is allowed enter “expense offset for 1099-misc.”