The 1099-C: Tax Consequences of Debt Negotiation

The 1099-C: Tax Consequences of Debt Negotiation

Of all surprises that can come into the mail for income tax season, perhaps one of the most dreaded is the 1099-C. The IRS categorizes some debts that are forgiven a income source, and thus entitled to taxes. You must file these forgiven debts on your tax return as income related to the cancellation, settlement, or forgiveness of a previously existing debt when you receive this form. But, as always, you can find exceptions and exclusions to the notification.

How Payment Can Hurt

Negotiating along with your creditors is an idea that is good. They have passed your account on to a debt collection agency, negotiating can reduce payments or even allow you to pay off debt all in one lump sum whether you are negotiating directly with your creditor or. More →