Posted on
January 4, 2010
at
11:51 pm
What's the connection between a legal settlement and the IRS 1099?
Posted on
January 5, 2010
at
2:15 am
It is a form that your creditor is supposed to send you so you can report the settlement as income on your tax return.According to some studies, consumers fail to report their settlement as income, and instead do so under "compensatory," or "personal injuries."
Posted on
January 5, 2010
at
2:22 am
I got this from a legal help site:"Although lawsuit settlements of clearly designated punitive damages received after August 20, 1996,
should be easily identified by the taxpayers and the preparers as taxable proceeds, there are still issues for examination..."What it means is that you probably need a tax lawyer to make sense of your situation for you.
Posted on
January 5, 2010
at
2:32 am
Legal settlement and the IRS 1099 - where to get them?-I am not sure about this - but creditors are usually obliged to send you a copy of form 1099-MISC.-You can also ask your accountant for additional copies. -Oder additional forms online -Call (800) TAX-FORM
Posted on
January 5, 2010
at
2:36 am
How/where to send:*Copy 1 of the 1099-MISC --> to your state tax office. *Copy "A" --> to the IRS. *Copy "B" --> to other entities you made payments to. *The creditors and other entities should include a copy of the 1099-MISC when they file a Schedule C or 1040 form to report their income received. *You'd get a Copy "C" from them. Keep that.
Posted on
January 5, 2010
at
2:37 am
what happens if i fail to report my legal settlement or file that form 1099?
Posted on
January 5, 2010
at
3:22 am
The creditors send the IRS a copy of Schedule C or 1040 form - so they'd know that you have that income. If you fail to report on your end - the IRS would send you a letter telling or demanding you to pay that amount plus additional taxes, interest, and penalties.But do consult with a tax lawyer - and verify the above statement.
