How to report money awarded in 2024
I received money thru a lawsuit , the amount was nearly 10k, how do i report this and what tax form do i use to report it,
Best Answer
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If the settlement was because of hearing loss, that would typically be grouped with damages for a physical injury. So, you might not receive a tax form at all, as settlements for physical injury are generally not considered taxable. We recommend reviewing the IRS publication below for more detail on this subject:
Answers
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"There are a lot of rules and exceptions for whether lawsuit settlements are taxable or nontaxable. The general rule is that damages for a physical injury or physical sickness are not taxable and are not reported on your tax return.
-Punitive damages are usually considered taxable income. The only exception would be a wrongful death under certain circumstances.
-Damages for emotional distress are generally treated as taxable income unless the emotional distress is related to a physical injury or illness.
-Other lawsuit damages such as lost wages, discrimination, or defamation are usually taxable income that need to be reported on your tax return.
-Reimbursed medical expenses are usually nontaxable and can be excluded from your tax return." FAQ ID: 10582
If the money awarded to you from a lawsuit is taxable, then you would typically receive a Form 1099-MISC reporting the $10,000. Once you have received the Form 1099, you can enter it in the software by selecting Income > 1099-NEC/1099-MISC.
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1099 misc? its for hearing loss? 3m