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Form 1099-C and 982
If you have had debt canceled or forgiven by a creditor, you may receive a Form 1099-C, also known as the Cancellation of Debt. It’s important to understand the tax implications associated with this form to ensure compliance with IRS regulations. Let us guide you through the basics of Form 1099-C and help you navigate the potential tax consequences.
What is Form 1099-C?
Form 1099-C is issued by a creditor when they cancel or forgive a debt of $600 or more. The form reports the canceled debt amount, which is considered taxable income in most cases. It’s important to report this correctly on your tax return, as failure to do so may result in IRS penalties and interest.
Key Points to Consider:
How to reduce your tax liability?
Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, is the key form used to claim income exclusions and reduce your tax liability. It allows you to reduce certain tax attributes, such as credits or deductions, as a result of the discharged debt.
Qualifying Exclusions:
Form 982 should be filed with your federal tax return for the year in which the debt was canceled or forgiven. It’s important to accurately complete the form and provide all required information to support your claim for debt exclusion.
How We Can Assist:
Contact Us Today To Save Taxes
Our team of knowledgeable tax professionals can ensure compliance, explore debt exclusion options, and advise you on how to minimizing your tax liabilities. Reach out to us below and we will handle everything with the maximum tax benefit.
Call us today at (866) 681-2140, email us at info@dimovtax.com, or fill out the form and we’ll get in touch immediately.
Dimov Tax is rated 5 stars on all major review platforms including Google, Yelp, Facebook, Angie’s List, Better Business Bureau, TaxBuzz, Thumbtack, Upwork, Bark, and much more.
Call us today at (866) 681-2140, email us at info@dimovtax.com, or fill out the form and we’ll get in touch immediately.
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