If I received a 1099misc for a settlement for personal physical injury in the amount of 33,000. Only received 55% of it. How do I report it?
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If I received a 1099misc for a settlement for personal physical injury in the amount of 33,000. Only received 55% of it. How do I report it?

 
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If I received a 1099misc for a settlement for personal physical injury in the amount of 33,000. Only received 55% of it. How do I report it?

This is how you should enter it:

  1. Open (continue) your return in TurboTax if you don't already have it open.
  2. In your program, search for 1099-MISC (upper- or lower-case, with or without the dash) and then click the "Jump to" link in the search results.
  3. Answer Yes to the question Did you get a 1099-MISC? (even if you didn't get one).
  4. Complete the top part and then enter the award amount or previously-deducted medical expenses in Box 3 Other Income.
  5. Fill out any other boxes from your paper 1099-MISC (if you have one), then click Continue.
  6. Select This was money from a lawsuit settlement on the Does one of these uncommon situations apply? screen and then answer the back wages question before clicking Continue.

IS My settlement taxable:

After doing some research on this question, we agree with the conclusions reached by Mark Luscombe, a principal federal tax analyst for Wolters Kluwer Tax & Accounting (which is a well-known publisher of an authoritative professional tax research service used by many CPA firms).

He is quoted in the San Francisco Chronicle (website platform) as saying the following:

"In general, any settlement you get for something other than personal physical injury or sickness is taxable.  Most other [legal] settlements, such as for back pay and punitive damages, are taxable.  In the case of property, if the settlement merely restores your original value, it’s not taxable, but if it enriches you beyond where you were before, it is taxable.

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