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Part of Lawsuit settlement is supposed to be tax free

Received  W-2 and 1099 from a lawsuit settlement with a former employer.  The W-2 represents the taxable portion and entered as usual in TT.  Regarding the 1099 portion, my attorney insists this is supposed to be free of Fed and State income tax but, TT doesn't support that.  Speaking to my former employer about the 1099 is out of the question.  Leaving out the 1099, may lead to an audit issue.  What should I enter into TT?  Any advise is appreciated?

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Part of Lawsuit settlement is supposed to be tax free

Likely not tax-free, I suspect your attorney is mistaken.  What exactly was the settlement for and why is it in two parts?  You also can't deduct any part of the settlement that you paid to your attorney, unless this was a case of unlawful discrimination.  

 

 

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