Class action lawsuit settlement check recording category?

I created a category named "Legal Settlement" for this. You can name it whatever you like. I have never been clear on whether this is taxable, but if it were, I'd assign the tax line item "Form 1040:Other income, misc." The amounts are always too small to affect the bottom line of my 1040 anyway.

Based on the information you've provided, the following Quicken categories may be appropriate for tracking your class action lawsuit settlement check:

"Other Income" - This category can be used to record any income that doesn't fit into the pre-defined categories in Quicken. Since the settlement award is not considered regular income, this category may be a good fit. Additionally, using this category allows you to easily track the total amount of the settlement award.

"Legal Expenses" - This category can be used to track any expenses related to the class action lawsuit, such as attorney fees or court costs. This category is not directly related to the settlement award, but it may be useful to track if you want to see the overall cost of the lawsuit.

"Punitive Damages" - This category can be used to track any punitive damages awarded as part of the settlement. Since the settlement award you received is considered punitive, this category may be appropriate. However, it's worth noting that this category may not be available in all versions of Quicken.

Regarding the tax implications of the settlement award, you are correct that taxes are owed on punitive damages. You should consult with a tax professional to determine the exact amount of taxes owed and which tax-related category to associate with the category you choose to track the settlement award.

It's important to accurately track the settlement award and any related expenses in Quicken to ensure that you have a clear understanding of your financial situation. By using the appropriate categories, you can easily generate reports and gain insights into your financial health.

Thanks.

The description of the settlement in my case indicates the award was punitive. IRS states "IRC Section 104(a)(2) permits a taxpayer to exclude from gross income "the amount of any damages (other than punitive damages) received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal injuries or physical sickness"

Note the phrase "other than punitive damages". So I believe it is indeed taxable. And you're right, I'd rather include my measly $35 that make some erroneous assumption it's not taxable and deal with the IRS should I ever get audited over this sort of thing...especially since I think it IS.

Thanks for the pointer. btw in case it helps anyone, here's a link to how this income should be entered into TurboTax: