I have my 1040 done by a CPA every year but this year I got a couple things and I want to have my ducks in a row as much as possible when I go in. :3eyes:
I got a 1099C form in the mail yesterday from an old old debt and I just had some questions about it.
That likely was issued by a debt collector or a creditor that is trying write it off as a loss. They are only supposed to go this if the debt has been forgiven. If not, they are breaking the law. http://money.msn.com/debt-management/when-debt-collectors-break-the-rules
It is from a old credit card I had, the interest rate went to 24% in two days after the government made that law about credit card company's not being able to charge a lot for late payments,etc (which up until this time I had none of). I had a balance of around 1500 and then it was 4800 a couple days later because they just took my principal balance and applied their "new" interest rate to it. I called, the CS said this was their response to the new law, I said you can't do that, they said, yes we can, I said well I can't pay that, they said well we will send it to collections then, which they did, I've gotten probably 10-15 different collection agency's contact me by mail and I sent them back the same letter stating I believed the debt to be in error so I'm not paying it and cease trying to contact me, which they did, usually. I even sent the letters registered mail. It says cancellation of debt on it but I never received any letter from them stating they were canceling the debt, just this statement from them now. I'm just wondering how much the tax would be on 4800 bucks, if it's 10% of that would be 480 so if that's what I have to pay to be finally rid of this then it's worth it. My credit is not that great anyways.
Your 1500 balance becoming 4800 in two days because they raised the interest rate to 24% makes NO sense at all. Do the math... You got behind and did not/could not pay. You can go to turbo tax on line and run the numbers for free. They only charge when you submit for an e-file. Read this if Your freaking out. http://blog.credit.com/2012/02/just-received-a-1099-c-dont-freak-out/
Are you sure? In my experience, I seem to remember that Turbotax will not let you progress once you enter any sort of 1099. I have never had a cancellation like you, but when I have entered other 1099 income in the past, you have to upgrade to the regular pay version (which is like 30 or 40 bucks) since the free version does not handle self-employed/contract workers. Ask your accountant, that is what they are there for.
I talked to them today and it's taxed at whatever your tax bracket rate is. TurboTax will let you enter up to 1 entry for a 1099, any more and it's like you said, you have to upgrade.
I think it depends on the 1099. A 1099-MISC like I had, assumes you are self-employed and the free version does not support that. 1099-B, 1099-G, 1099-INT, etc those are different. Everybody has at least a checking and savings account (in which you might get two different 1099-INTs). I guess it makes sense that it would be taxes at regular brackets. It isn't a capital gain and it is basically just normal income.
Here is a link to turbo tax start for free pay when you file! http://turbotax.intuit.com/personal...ode=3468337910&productid=&abtest=random=70823 You don't pay till you file on any version free or not so free. In the upper right you will see your return amount +/- as you progress in real time. When you are done and satisfied you don't need to file in another manner and want to file then you need to pay. You can try multiple ways of filing to see what is best and never pay till you file. Honestly your cpa will charge you 3 to 5 times as much to file even if you did pay.
