This might not be an edge-of-your-seat finance blog, but it is an edge-of-your-tax-season life saver. If you’re working with a debt settlement, debt negotiation ordebt relief company, it’s more than likely it’s your job to handle the possible tax repercussions, or risk paying more penalties than you need to.
Creditors are required to report canceled debts exceeding $600 to the IRS and you are required to report the same as income on your annual tax return. If you had any settlements in the previous calendar year, you may be receiving an IRS form 1099-C for miscellaneous income. Creditors are required to mail tax forms by January 1 in most cases but can have up to three years or more by state laws. If you completed the change of address to ours, we will mail any tax forms we receive immediately you.
We’ve have gathered information that may be useful in educating yourself with the tax laws in regards to debt settlement. Check it out here.