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Question When Law firm issues a 1099-Misc for Medical Lien payments in Personal Injury Settlements ?
When a Lien in a Settled, Personal Injury Lawsuit /Legal Case, for a Medical, Hospital or Healthcare Service Provider, is Paid-off Who is ultimately issued an IRS 1099-Misc Year-End Tax Form [for Reporting Income]: The Lien Holder/Funding Company or the Medical/Hospital/Healthcare Provider?
3 Answers
- Anonymous1 year ago
IN GENERAL, reimbursement and verdicts for pain/suffering are tax free.
1099's are issued to the person who benefited from the funds.
- oldprofLv 71 year ago
Who got the money? That's who.
The purpose of all 1099s is to tell the recipient of those forms what income was reported to the IRS in the recipient's name. You see the IRS gets copies (or similar) of all those 1099s you got. That's how they know what you earned and should report on your 1040.
Then you report that money in your 1040, do your tax calculations, and send in your 1040. And when IRS checks your 1040 they make sure everything you received as indicated by their copies of all your 1099s is reported by you on the 1040.
