I owe about 22,500 in debt, and got a letter to settle for 15,700.  It is extremely tempting but what are the negatives of having to file a 1099C if I continue to have good, regular income?  I had extreme debt & bad luck paying it off, then got an awesome job and sold some stock so I am in the clear.  Should I take that 7K discount or will it bite me bigger than that in the end?  What I mean is will it bite me by either having that on my record, or paying more taxes?  Thanks for the replies - I am trying to research online also. :)
123063
Negatives - you will have to claim the remaining amount of your account after settlement as income and then pay taxes on it (hence the 1099 form).  Also - a settlement is a major delinquency on your credit report which will continue to report for the next 7-10 years.  The 1099 will not reflect on your credit report.  The account will show as "legally paid for less than the full balance" which isn't the best thing to have on your credit report.\n\nThings to consider when settling:  \n1)  If you can afford to pay $15,700, will the remaining debt ($6800) be manageable on a monthly basis (should be about $160 depending on your interest rate)?  If so, then pay a good chunk of you debt off and handle the rest of your balance normally to avoid settelment.  Remember that a smaller balance will mean lower monthly payments which can actually help to BUILD your credit up rather than ruin it.\n\n2)  Is the likelihood that you will end up charging off the account greater than ever paying it down?  Do you have more money going out every month than comes in?  Settlement may be a better option for you as "charging off" your account looks much worse than settling.\n\nAlways try to avoid a settlement by calling your creditor to see if you qualify for a hardship or payment program.  If you can commit to some long term monthly payments this will greatly benefit your credit overall and avoid you worrying about 1099 forms.  \n\nLastly - don't bother asking creditors to remove your delinquent account from your credit report after you settle.  They are legally not able to do this as they are bound to accurately report the status of your account to the credit reporting agencies.
527058
It's important to pay your taxes on time, but if you don't the IRS will assess a late payment penalty of 1/2 of 1 percent per month, up to 25% of the amount of unpaid balance, plus interest per month which has ranged between 4% - 9% in the last few years.\n\nhttp://www.irs.gov/businesses/small/article/0,,id=108330,00.html\n\nPenalties and interest apply to years when money is owed.  If you get a refund next year, the IRS will withhold it, and apply it to your balance due.  You can contact the IRS and ask to see your tax account.  They will also send you an account statement showing your current balance owed, if you ask for it. \n\nThe interest charged by a bank or credit card is often lower than what is accruing on your account at the IRS.  It sometimes makes sense to borrow money from another source in order to pay off your balance owed to the IRS. \n\nThe same is generally true for state taxes as well.  Contact the Department of Taxation to see your state income tax account, and to request a statement.\n\nThe overtime you worked bumped you up into a higher tax bracket and increased your percentage owed.  If you couldn't pay your taxes because you had a family emergency, or other reasonable cause, the IRS has the ability to reduce the penalties they've assessed.  You must contact them by calling or writing to your taxpayer advocate listed on your Notice of Tax Due.\n\nhttp://www.irs.gov/individuals/article/0,,id=123423,00.html
129833
An extension is NOT a license to pay after the due date.  If you file an extension, you still have to pay something when you send it in.  Your best bet is to contact the IRS and explain your situation and they will set up a payment schedule with you which will cost you less in the long run.  If you don't, you'll be hit with high fees and penalties.\n\nKeep in mind that until you get the amount paid off they will be charging you interest the same way a credit card company would for not paying off the full amount all at once.\n\nFor next year, you may want to claim zero dependents on your W4 (if you work)...then you're more likely to get money back or at least owe very little. It will mean you get less money during the course of the year, but you won't be in the position of having to pay at tax time either. You probably only have to claim this way for about 6 months or so to cover what you may owe.\n\nMake some charitable donations during the course of the year, even if it's old clothing or household items you don't use anymore.  Donate to an accredited organization like the Salvation Army or the Red Cross and keep your receipts.  You can claim them on next year's taxes and bring the amount you owe down that way.\n\nConsider opening an IRA (not a Roth IRA).  You can take deductions for the amount you put in each year.
253160
Here is how the game is played....\n\nIf you pay off your debt, you still have to deal with that negative report on your credit.\n\nPlacing "paid" on it does NOT remove  negative information such as late fees or that it went to collections.  Those who tell you otherwise are lying or ignorant.  I've counsoled many, many people who made the mistake of paying off debts, hopeing to get their credit improved, only to see it barely helped at all.\n\nThe ONLY person who can edit/delete credit information is the creditor to placed that information there.  And it's very unlikely you will get their cooperation once you have paid the debt.\n\nTherefore, before you pay them a dime, get IN WRITING that they will remove all negative information from your credit report.  Don't pay them a dime unless they do!\n\nRemember, you are trying to fix your score.  Why pay them if it's not going to help you out?  \n\nUse the sample letters below and write a negotiation letter.
361101
You are talking about filling out the W-4 at work, I'm assuming.  The more exemptions claimed, then the less tax they take out during the year.  But when you go to file (in April), if you claimed 2 during the year and you are single, you will most likely owe tax, and may be subject to a penalty.  Best to claim 0 now.  The best way to approach tax issues, is to come out even (i.e., no owe, or no refund).
442059
If you work on a 1099, you pay self-employment taxes of 15.3%.  You'd pay half of that as FICA deductions if you were an employee, so to compensate for the extra you pay with a 1099, you'd have to make around an additional $12,000 to equal $150K for a W-2 employee.\n\nFringes like insurance depend on what you'd have to pay to get comparable individual coverage, and that depends on your family situation.  You'd have to check around in your area to see what it would cost you, then add that on to the $150K + $12K.  And don't forget items like vacation and sick days - as a contractor, you'll only get paid for the actual hours that you work.\n\nGood luck.
46043
As long as you worked in a state, you're required to pay taxes on the income you earned in that state for the part of the year in which you worked there.  As far as how much taxes you may pay, it depends on whether there were any taxes withheld by the firm for which you worked (which would be reported on the 1099.)  \n\nUnder the circumstances, it might make sense for you to invest in tax preparation software this year to prepare all the returns - it will help you get organized, and save you a great deal of time preparing the returns.
292802
A "charge off" basically means that the company that you owe has given up on you and taken a charge on their books as a bad debt.  This way, they can report you as a loss and not have to pay taxes on money they never got.  \n\nBut that's not the end of it.  First, they may sell your debt to a collection firm or some company that will keep trying to collect from you.  They tend to be very aggressive and sometimes abusive, even disobeying the law to collect sometimes.\n\nSecond, it will most likely be reported as a "charge off" on your credit report, which is one of the worst things to have on your credit.  Normally, after 7 years, bad credit like this will "roll off" your credit report, because after 7 years of no action on your account, the information expires.  However, if you make any payments during that 7 years, the seven year period starts all over again!!!  Also, if a company really hates you, or if they think you've done it on purpose, there are ways that they can play the system, and keep your bad record alive longer.  Most times they won't do that, but you never know.  Basically, it's good to avoid a charge-off if you can, and if you plan to buy a house or anything major in the next 7 years, it will make it extremely difficult.
218595
they may negotiate the interest portion of the balance you owe. But- not likely... They would prefer that you just keep your money and make the minimum payment each month for the rest of your life.  What incentive do they get by taking less than the balance?  They don't want you to pay the account off. They gave you the account in the first place so that you would use it, keep a balance on it so they can charge you interest.  Why not just negotiate a lower interest rate.  If they say no to that, tell them you will be shopping for a lower interest card & do it & close your account.\n\nThe only situation that I know where they will eagerly negotiate and accept less than you owe is if you are in default on your account already.  They will then be more likely to take what they can get now instead of spending the money to try and go after you via collection agencies or court. Since you just refi'd your house I am assuming your credit accounts are in good standing though & probably doesn't apply to your situation.
98398
If you made over 600 they employer has to give you a 1099. If he has your social I'm sure that he is going to report that you were pd. The IRS will also get a copy of this 1099. So the chances of them looking into it are good. If you make over 400 on a 1099 you have to file. You will file on a 1040 form. Your 1099 income will go on a schedule C. You will also take the expenses form that same form. Just save yourself some money and do it now. If you don't you will pay interest and penalties.
514733
On you credit report is going to say settled for less that full amount and the credit card company is going to give you a 1099 that you have to file with the IRS and you will have to pay about 40% of what ever the unpaid amount is in taxes.
515388
I'm not sure what your question is, so I'll comment on "People say if they owe you , it's not as bad as to if you owe them."  The reverse is more accurate.  If the IRS owes you a refund, you made an interest free loan to the government.  If you owe them a small amount with your return, they 'loaned' you that amount.
578256
If you don't send anything, they will audit you and find your filing incorrect and ask you to pay the difference and the interest. What is the proof that you can't provide? It's hard to believe they are auditing you just for one thing. Do you think there are more they are questioning? I got a letter once because the number didn't match and they didn't have 1099 to prove it. Because I didn't have time to do all the research, I ended up paying them a couple hundred dollars. However, every IRS employees I talked to was very helpful and polite. Why don't you try telling them you can't find the document and see what they would say?
73179
If your income goes up at all and puts you out of the Earned Income Credit guidelines, it could pose a real problem.  To be safe you should continue claiming 4 which is high as it is.  Besides the return is nice at the end of the year and you dont really notice the withholdings much.
332450
Okay - I can't really help you collect on this debt other than to document EVERYTHING - copies of all letters, dates of calls, names of who you spoke to, etc.  However, in the future, if all possible, get at least half up-front BEFORE giving your service.  Be sure all your invoices go out with "terms" clearly marked.  Perhaps offer a discount for paying within 10 days - common terms are 10%Net30 and large companies tend to take advantage of that - and you therefore get paid quicker, keeping your cash flow running smoother.  Good Luck collecting on the deadbeats!  Don't let them get away with it if you can help it.  If worse comes to worse, your accountant will be able to write it off at the end of the year.
177914
Pretty good question.  You might consider this as well, if you have a long (inactive) debt on your record, there may be a line item on your credit report from that company as well indicating that you defaulted.  The ammount may not have been worth their effort to try to collect, but that entry on the credit report may also have an effect on your credit score.  On the other side, it may not be worth your effort to pay the back debt and get the company to resolve the credit issue.  On a third side, you should always pay off your debt as soon as possible just because it is the right thing to due.\n\nRomans 13:8 - Let no debt remain outstanding, except the continuing debt to love one another, for he who loves his fellowman has fulfilled the law.
62146
You will have a hard time with the IRS come tax time with 1099 workers. Do they work with other firms? Do you set their hours? Are you in control of thier working conditions. Do they supply their own equippment or work solely with yours. The wrong answer to these questions will raise red flags at the IRS. If your 1099 workers don't pay their taxes you'll have hell to pay. You need workers comp.