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    NICOLEOVER's Avatar
    NICOLEOVER Posts: 3, Reputation: 1
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    #1

    Apr 15, 2008, 08:40 AM
    1099 C - Paying Taxes on Credit Card Debt
    Why do I need to pay taxes on money I owe a credit card company? When I was making payments of $300 dollars , I never received a 1099. I am working with a Debt Management company to pay off my debt credit card companies. I finally was able to pay off over $700 settlement to one of my Credit Cards. I have been informed that I will receive a 1099-C for paying off the company. :confused:
    Pompanomom's Avatar
    Pompanomom Posts: 10, Reputation: 2
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    #2

    Apr 15, 2008, 09:03 AM
    A 1099-C is used to report a cancelled debt. In your case, you probably negotiated a final payment that was less than what you actually owed the company. For example, you actually owed $1,000 but the company accepted as a final payment only $700 and 'forgave' the remaining $300 (you don't have to pay it). So the 1099-C will report the $300 as income to you and in most cases, you will have to pay taxes on that.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #3

    Apr 18, 2008, 02:13 AM
    Debt cancellation is reported as other income on Form 1040.
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