income resulting from dispute

[helpwithtaxes]

What is the name of your state? NC.
My husband changed jobs recently and he felt the company that he left owed him money for commissions. The company disagreed (as it turns out, we have learned this company does this routinely to their overseas salesmen). After threatening to hire an attorney, they eventually settled on an amount, about 1/3 less than we believed they owed. The company is headquartered in Europe and wired my husband the amount directly from Europe. There is not a 1099 or W2, so we are not sure where to claim this on our taxes. We use Turbotax. Is this considered "tip income"? Thanks.

 

[LdiJ]

What is the name of your state? NC.
My husband changed jobs recently and he felt the company that he left owed him money for commissions. The company disagreed (as it turns out, we have learned this company does this routinely to their overseas salesmen). After threatening to hire an attorney, they eventually settled on an amount, about 1/3 less than we believed they owed. The company is headquartered in Europe and wired my husband the amount directly from Europe. There is not a 1099 or W2, so we are not sure where to claim this on our taxes. We use Turbotax. Is this considered "tip income"? Thanks.

Its self-employment income and belongs on his schedule C.

 

[helpwithtaxes]

He's not self-employed. He was an employer of this company getting paid salary plus commission.

 

[helpwithtaxes]

Whoops! I mean he was an employEE of this company. He received salary plus commissions and the dispute was the commissions.

 

[Snipes5]

Commissions are usually reported on a form 1099. That makes him self employed for purposes of the commisions. If they are reported on a W-2, then he can of course treat them like ordinary wages.

Snipes