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Do I still have to file a 1099-c for cancelled credit card dept if the company sent it to a collection agency and I paid it?
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Do I still have to file a 1099-c for cancelled credit card dept if the company sent it to a collection agency and I paid it?
Yes, report the 1099-C on your tax return - if you received a Form 1099-C for cancelled debt, then the IRS also received it and will be expecting you to report it on your tax return.
Since you paid the debt, you will have to enter an adjustment to remove the cancelled debt income from your taxable income.
To enter the adjustment:
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Go to Less Common Income, Miscellaneous Income and Other reportable income. Enter "Lawsuit settlement" in the Search Box and Select "Jump to lawsuit settlement" "to get to this screen ("Lawsuit settlement" is just an effective search term to get to this interview screen)
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Continue to the screen "Other Taxable Income". Enter the description as "Debt Repayment" and the amount as a negative number. Entering "-$ XXXX" here will offset the cancelled debt amount included on the Form 1099-C. These are NOT wages.
A corresponding negative amount will be entered, and line 8 of Schedule 1, will be zero.
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