Solved: I received a 1099-MISC AND a W-2 for a settlement. Wage portion on the W-2, 1099 is for damages and attorney fees. Do I omit the wages when entering the 1099?
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I received a 1099-MISC AND a W-2 for a settlement. Wage portion on the W-2, 1099 is for damages and attorney fees. Do I omit the wages when entering the 1099?

I don't want to be taxed twice on the wage portion since I already entered it from the W-2, but when entering the 1099-MISC (which includes only the damages and attorney fees) Turbotax asks if any of the following apply:

"This money is from a lawsuit settlement". Yes.

Then: "Was any part of the lawsuit for back wages?" Yes.

I am then required to enter the wage portion a second time, even though its not listed or a part of the 1099?

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Level 15

I received a 1099-MISC AND a W-2 for a settlement. Wage portion on the W-2, 1099 is for damages and attorney fees. Do I omit the wages when entering the 1099?

Since the 1099 does not contain the wage portion of the settlement, answer "no" to the back wages question.  Otherwise you will be taxed a second time.  (It is less common to receive a W-2 and an 1099 even though that is the way it should always be done.)

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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1 Reply
Level 15

I received a 1099-MISC AND a W-2 for a settlement. Wage portion on the W-2, 1099 is for damages and attorney fees. Do I omit the wages when entering the 1099?

Since the 1099 does not contain the wage portion of the settlement, answer "no" to the back wages question.  Otherwise you will be taxed a second time.  (It is less common to receive a W-2 and an 1099 even though that is the way it should always be done.)

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

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