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da4280

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Is income from a class action law suit settlement taxable?

(Asked 02/06/09, Views 126)

Question has been solved by TurboTaxNorton

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TurboTaxNorton

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All income should be reported. If you have not received a class action settlement reporting form, call the issuing party to obtain it. Note; if you are awarded an amount larger than your payment from a legal firm, but are only receiving a lesser amount after fees, tax law requires you to pay taxes on the amount awarded, not just on what you receive. Be sure to check what the reporting form says. Enter legal awards under miscellaneous income. Any fees and expenses incurred in the settlement can then be entered as a miscellaneous itemized deduction subject to the 2% of AGI floor.

(Posted 02/16/09)

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