Hi there!
I received a partial lawsuit settlement for $20k in back wages in 2019. Since my lawyers haven't received the full amount, they are continuing with litigation against my former employer.
The company is based in Australia, and they've never given American employees tax forms. My lawyers are trying to secure a W-2 or 1099-MISC, but I doubt my former employer will produce them.
How would I pay taxes on the partial settlement??
Thank you.
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You will need to report the settlement on back wages on your tax return this year even if it just a partial settlement. All funds, you received during the year, need to be reported even if you do not receive a 1099-Misc.or another tax document.
The Gross Settlement amount should be entered as income even if your attorney's fees were deducted from amount you receive.
To enter the settlement income you need to:
If you subsequently receive a 1099-Misc or a W-2 you will need to delete this income entry and enter the form on your return.
Prior to 2018 you would have entered the attorney fee amount in the Miscellaneous Itemized Deductions subject to 2% on Schedule A. Under The Tax Cuts and Jobs Act this section is no longer available.
You will need to report the settlement on back wages on your tax return this year even if it just a partial settlement. All funds, you received during the year, need to be reported even if you do not receive a 1099-Misc.or another tax document.
The Gross Settlement amount should be entered as income even if your attorney's fees were deducted from amount you receive.
To enter the settlement income you need to:
If you subsequently receive a 1099-Misc or a W-2 you will need to delete this income entry and enter the form on your return.
Prior to 2018 you would have entered the attorney fee amount in the Miscellaneous Itemized Deductions subject to 2% on Schedule A. Under The Tax Cuts and Jobs Act this section is no longer available.
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