Lou Rep Points:
Posted on
December 10, 2009
at
4:13 am
Good day, please explain to me, why I am paying taxes on my credit card settlement?
Posted on
December 10, 2009
at
4:20 am
please explain to me, why I am paying taxes on my credit card settlement?Hi, it's because the IRS considers what you've saved on settlement as income.
Lou Rep Points:
Posted on
December 10, 2009
at
4:24 am
Is there a way to be exempted from it? How much are they taking? How does it work?
Posted on
December 10, 2009
at
4:35 am
Yes if you are insolvent.Insolvency - is when the value of your liabilities is more than that of your assets. How much is the IRS going to take? I am not too sure but it's about 25% of the settled amount. You might want to consult with a tax attorney about that.
Posted on
December 10, 2009
at
4:54 am
How does it work?Your creditors would send you IRS form 1099 and on your income tax return, you must report your settlement as an income.If you want to apply for insolvency you need an IRS form 982.
Posted on
December 10, 2009
at
4:55 am
Paying taxes on credit card settlement, what happens if the consumer fails to do so?
Posted on
December 10, 2009
at
5:06 am
Just to add to how much the IRS would take ...if the forgiven debt is below $600, the consumer does not have to report that as income.There might be penalties and fees if the consumer fails to report a settlement more than that amount.
