#debtcancellation

Before jumping into debt cancellation, take a moment to think beyond just the short-term relief. Sure, wiping out debt sounds great, but what happens next? Debt cancellation can impact your financial future in ways you may not have considered, including your credit score and potential tax consequences. Before you jump on the bankruptcy train, weigh the pros and cons. Take into account your long-term financial goals. Do you want to buy a home, save for retirement, build your kids' college fund, or even just get on stable ground with your money? Debt relief is more than just a quick fix – it's a step in your financial journey. Make sure it's the right one.

According to the IRS, nearly any DEBT YOU OWE IS canceled, discharged or forgiven becomes taxable income to you. You'll receive a 1099 C form from the lender that forgave the debt "Cancelation of Debt". How the IRS classifies cancelled debt You might consider it unfair that a debt you successfully cancel or negotiate away comes back to haunt you as taxable income. However, the IRS classifies cancelled debt as income because you received a payment you didn't return. When you first borrow money, you don't have to pay tax on the money you receive because you are bound by a contract to pay it back. Once that contract no longer exists, the money is yours to do with as you please. Since you essentially received income for free, the cancellation of your obligation to pay it back makes it taxable. Form 1099-C According to the IRS, nearly any debt you owe that is canceled, forgiven or discharged becomes taxable income to you. You'll receive a Form 1099-C, "Cancellation of Debt," from the lender that forgave the debt. Common examples of when you might receive a Form 1099-C include repossession, foreclosure, return of property to a lender, abandonment of property, or the modification of a loan on your principal residence. #xcs #xclusivecreditsolutions #financialfreedom #debtcancellation #1099cform #creditmonitoring #creditscore

It just simply isn't a game! Understand that your credit report and score are the most VITAL aspects of your financial health! PERIOD! On a mission to help people understand, repair and boost their credit scores!! #xcs #xclusivecreditsolutions #debtcancellation #creditscore #creditrestoration #creditsweep #boostingscores

If your lender cancels part or all of your debt, it is usually considered income and you normally must pay tax on that amount. However, the law allows an exclusion that may apply to homeowners who had their mortgage debt cancelled in 2015. Here are 10 tax tips from the IRS about debt cancellation. If you have any further questions, contact us!