If I go into a credit card relief program for a forgiveness of debt what will the tax form 982 do to help me?
I was told which in the year we would have the credit converging which we should record the #982 form. This will do what for me? we have concerns about with the "forgivness of debt" apropos the taxiable income.
There are one Suggestion to question “If I go into a credit card relief program for a forgiveness of debt what will the tax form 982 do to help me?”
When the debt is cancelled, you will get a form 1099-C for the amount you aren’t paying.
The IRS says to add this to your income. If you are in the 15% tax bracket and had $10K cancelled, you pay income tax of $1500.
If you are either through bankruptcy or are insolvent, you use form 982 to POSTPONE the cancelled debt to a later year. For the totally broke, they may never include the money in income. For others, they will.
When the debt is cancelled, you will get a form 1099-C for the amount you aren’t paying.
The IRS says to add this to your income. If you are in the 15% tax bracket and had $10K cancelled, you pay income tax of $1500.
If you are either through bankruptcy or are insolvent, you use form 982 to POSTPONE the cancelled debt to a later year. For the totally broke, they may never include the money in income. For others, they will.
If you aren’t broke, you can’t use the form.
See irs pub 4681.