I was due $80,000.00 this year from an "Employment Contract" from my previous employer. In 2018, the company let me borrow $30,000.00. Originally it was supposed to be deducted fromt he above Payout. However, due to his kind generosity and the fact that I am struggling, he forgave the loan and paid the full $80,000.00, which I rolled over into an IRA. MY QUESTION- Do I have to report the $30,000.00 on my tax return. I do not think he meant for me to have to pay taxes on loan, but I do not know how to tell him to handle?
I get a 1099-NEC each year for Consulting Work done for him. (2024 is $2500.00). I was not doing consulting work at the time of the loan so I do not think I should have to pay self employment tax on it. Is there a way for the company to write off this loan without giving me a 1099, report on something other than 1099-NEC so only state and federal tax have to be paid, any other way to either eliminate or reduce the taxes I have to pay. If I receive income on a 1099-NEC, taxes will over $10,000.00. Plus I will have to pay taxes on the money when I withdraw from my IRA to pay taxes. Trying desperately to save this money for Long Term Care, since I have severe health issues and live alone. ANY ADVICE OR HELP WOULD BE GREATLY APPRECIATED!
