schildi
Well-Known Member
3718 and no text
Joined: Jan 14, 2011 1:38:58 GMT -5
Posts: 1,846
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Post by schildi on Mar 4, 2016 1:02:17 GMT -5
Got some settlement money last year.
Received a W-2 and a 1099-MISC with it.
Paperwork says that a portion is considered income and tax was deducted. That part is covered by the W-2.
The remainder is considered "statutory multiplier damages", listed on the 1090-MISC.
Question: Are these "statutory multiplier damages" considered to be taxable income?
Any help is much appreciated!
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taxref
Junior Member
Joined: Dec 31, 2010 11:09:13 GMT -5
Posts: 220
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Post by taxref on Mar 4, 2016 12:36:48 GMT -5
This sounds like the result of a wrongful dismissal lawsuit. If that is correct, all of the proceeds would be taxable to you.
If any portion of the proceeds were compensation for a physical injury or sickness, which sometimes does happen in wrongful dismissal cases, that would change the answer. You should post more information if that is the case.
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rangerj
Junior Member
Joined: Jan 21, 2011 13:39:35 GMT -5
Posts: 242
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Post by rangerj on Mar 6, 2016 13:04:20 GMT -5
Notes: The legal fee treatment can be tricky and a consultation with a tax professional may be wise. The legal costs, e.g. attorneys fees and legal expenses, that are associated with any tax exempt amounts are NOT deductible. Legal expenses are generally itemized deductions subject to the % of AGI limitations.
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schildi
Well-Known Member
3718 and no text
Joined: Jan 14, 2011 1:38:58 GMT -5
Posts: 1,846
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Post by schildi on Mar 7, 2016 23:39:15 GMT -5
None of it is for physical injury or sickness, so I am assuming it's all taxable income. Dang!  Thanks for the responses! |
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