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1099-MISC for 44 cent settlement costs almost 3x to use Turbotax

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Jay968

Member
What is the name of your state? California

I do my taxes using Turbotax and use the standard (least expensive option which costs me $38).
This year, I got a settlement check from a settlement administrator.
The settlement check was for 44 cents!
I never even bothered to cash the check!

I must fill out a 1099-MISC in Turbotax to report this to the IRS and Turbotax is telling me I cannot use the standard Turbotax option, but must upgrade to the Deluxe version for $98.
This is insane.

Any suggestions?
What would happen if I reported it as a W-2 instead of a 1099-MISC?

Thanks
 


LdiJ

Senior Member
What is the name of your state? California

I do my taxes using Turbotax and use the standard (least expensive option which costs me $38).
This year, I got a settlement check from a settlement administrator.
The settlement check was for 44 cents!
I never even bothered to cash the check!

I must fill out a 1099-MISC in Turbotax to report this to the IRS and Turbotax is telling me I cannot use the standard Turbotax option, but must upgrade to the Deluxe version for $98.
This is insane.

Any suggestions?
What would happen if I reported it as a W-2 instead of a 1099-MISC?

Thanks
Don't report it on your taxes at all. It is 44 cents. You would normally round down for anything under 50 cents so you would be rounding down to zero. The IRS will not expect you to include it on your taxes.
 

Taxing Matters

Overtaxed Member
What is the name of your state? California

I do my taxes using Turbotax and use the standard (least expensive option which costs me $38).
This year, I got a settlement check from a settlement administrator.
The settlement check was for 44 cents!
I never even bothered to cash the check!

I must fill out a 1099-MISC in Turbotax to report this to the IRS and Turbotax is telling me I cannot use the standard Turbotax option, but must upgrade to the Deluxe version for $98.
This is insane.

Any suggestions?
What would happen if I reported it as a W-2 instead of a 1099-MISC?

Thanks
I agree, you don't need to report the 44¢ check. It would make absolutely no difference in the final computation of your tax.

This check was a waste by the firm handling the settlement. It created more in administrative costs for the firm (thus reducing the pot to pay out to the class members) to send it to you than the 44 cents you received.
 

davew9128

Junior Member
This check was a waste by the firm handling the settlement. It created more in administrative costs for the firm (thus reducing the pot to pay out to the class members) to send it to you than the 44 cents you received.
Sadly, the default for many 1099 issuers is to send it to everyone who got any payment, whether is was under $600, was by credit or debit card, or is a corporation.

The bar is low...
 

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