Question

Misc 1099 form and the calculating 2022 Taxes

Forum|Forum|3 years ago
April 10, 2023
1 reply
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Hello

I am working on 2019 Tax Return. Original.

I am requesting assistance on a 1099-MISC form and to calculate how much taxes I should owe for Tax year 2022

1099 Form came from an attorney office where there was a settlement.

In box 3 Other Income is $19K Gross amount of my damages). Box 14 (Gross Attorney Fees) is blank, however the attorney fees are $3600.00 (net contingency fee) that was kept by attorney.

I have a letter from the attorney saying the amount I may deduct for tax purposes in $3600.00.

So how would I put these figures in TurboTax and would I include the letter from the attorney with my taxes?

Second, how do I calculate my 2022 taxes owed if I want to do an extension with payment.

I am married filing jointly with one dependent.

I really would like to talk to someone in the community.

How do I contact you?

J

JamesG1

First of all, I am confused by the statement: "I am working on 2019 Tax Return. Original."

The following refers to filing the 2022 Federal 1040 tax return.

This TurboTax Help provides guidance to file an extension of your 2022 Federal 1040 tax return. An extension gives you until October 16, 2023 to file your taxes instead of the tax deadline of April 18, 2023. Be advised that an extension does not give you extra time to pay your taxes, which are due on April 18.

If you received an IRS 1099-MISC for a lawsuit settlement with income in box 3, the income is likely taxable as other income.

In TurboTax Online, in the search magnifying glass in the upper right hand corner of the screen, search for 1099-misc and select the Jump to link
If you're asked Did you get a 1099-MISC?, answer Yes
1. If you've already entered a 1099-MISC, select Add Another 1099-MISC
Enter the information from your 1099-MISC and select Continue
On the Describe the reason for this 1099-MISC screen,
enter lawsuit settlement and select Continue
On the Does one of these uncommon situations apply? screen, select This was money from a lawsuit settlement and then answer the back wages question before selecting Continue.

Now you have entered the IRS 1099-MISC for the full amount of the settlement.

If you are allowed to deduct the attorney's fees and create an 'above the line deduction', follow these steps:

Down the left side of the screen, click Federal.
Down the left side of the screen, click Wages & Income.
Click Show more to the right of Less Common Income.
To the right of Miscellaneous Income, 1099-A, 1099-C, click the Start / Revisit button.
To the right of Other reportable income, click the Start / Revisit button.
At the screen Other Taxable Income, enter a description such as “Attorney's fees” and the attorney's fees as a negative amount.

The entries will be reported:

on line 8z of Schedule 1 of the Federal 1040 tax return, and
on line 8 of the Federal 1040 tax return.

I would not include the attorney's letter with your 2022 Federal 1040 tax return but I would retain a copy should a tax authority have questions about your return at a later time.

You may post your questions here and someone will respond.

@Tommiedaizell

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