I received a check from a Yahoo data breach settlement in 2023. Is this taxable? If so, how do I report it on my taxes?
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As SharonD007 mentioned, legal settlements are often taxable. Non-injury settlements are considered other taxable income. Normally companies do not issue a Form 1099-MISC for payments under $600, but you should still report this income on your tax return.
[Edited 3/26/24 | 11:40 AM PST]
It depends. Legal settlements are often taxable, depending on the type of settlement and would have been indicated in your settlement agreement. Non-injury settlements are considered other taxable income. You should receive a Form 1099 if your settlement is taxable. You will be taxed on the income based on the tax bracket that you fall in and the federal income tax rates.
Refer to the TurboTax article Are legal settlements taxable? for more information.
If you receive a form 1099-MISC, follow the instructions below to enter your settlement income:
For additional information, review the TurboTax help article Where do I enter an award from a taxable legal settlement?
No matter what the amount of the settlement check will a MISC-1099 will be sent out (because it is a small check)? I want to make sure I know if I need to put this on my taxes.
As SharonD007 mentioned, legal settlements are often taxable. Non-injury settlements are considered other taxable income. Normally companies do not issue a Form 1099-MISC for payments under $600, but you should still report this income on your tax return.
[Edited 3/26/24 | 11:40 AM PST]
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