Well, without knowing all the details, I can just give you general info.
The 1099-C is reported on your tax return like any other 1099. You report the income amount for the tax year shown on the 1099-C (i.e. a 1099 showing YR 2015 is reported on your 2015 tax return filed in 2016). You have to report the 1099 amount on your tax return, because the credit card company sends a copy to the IRS. The IRS will send you a notice if they don’t see the amount on your return.
If it’s CC debt incurred in personal purchases (as opposed to business), then you report the amount under “Other Income (not subject to self-employed taxes)”. It adds to your gross income before deductions. Assuming you only have a standard deduction and the 1099-C is your only income, you’ll just pay the ordinary income tax bracket rates on your net taxable income.
Even if you can’t pay your income taxes, go ahead and file your return on time to avoid late filing penalties (5.0% a month). The interest rate on taxes due is only 0.5% a month.
This is only one of several scenarios for reporting cancellation of debt (COD) income. The IRS does have provisions for excluding COD income. For example, you can claim that you were insolvent at the time the debt was forgiven (usually claimed for cancelled mortgages). If you feel this applies to you, then consult a CPA to prepare your return.
Does anyone use online banking at all? I have been looking at the rates for savings accounts from banks like Ally, and they are way better than what I currently have (.05%). The fact that it is online does have me a bit apprehensive, but I am seriously considering opening up a savings account just to let my play money sit there and incur interest.
In NY, that’s 2500/month, more than double. Chicago looking cheap to me.
I’m in NY and looking too, but anything that’s not trash is at least 2mil. Trying to see if there is anything that’s within 1.5 hours of lower Manhattan that’s not in NY.
I forgot to mention that my rent is that much for south side Chicago. Once you get to south loop its about 2k+ for a 2 bed on up.
Here you can find some really nice places for under 1 mil, but it really depends on what you are looking for. For example, Lincoln Park is basically the neighborhood to live and if you want a detached single family home, then you will spend at least 2 mil. Right now the condo game is looking a lot more appealing. Would have never considered a high rise before, but honestly the space along with the amenities seem totally worth it.
Banks and the federal reserve are completely against savers and have been for the last decade or so. If your money isn’t in an IRA, stock or bond you can pretty much can forget about even getting inflation matched interest rates. The only reason to have any money in a savings account is if you are intending to make a large purchase of some kind like a home. Right now I am just putting extra money toward my mortage, but my wife and myself both contribute the legal maximum to our 401K and we both contribute the legal maximum to our traditional IRAs, but after our house is paid off I am going to have to start looking toward other ways to invest our money. This will be about 2 years from now, but does anyone have any tips on good alternatives to a savings account? Is there a better option than a money market account?
I was already moving my cash into the stocks and bonds anyways. Even if my bank follows suit in the near future, I’ll be pulling interest. Probably gonna look for the fattest rats I can find too.
Been really grinding out and saving. Trying to get a million by time I am 40 (11 years to go).
been looking at building my credit score some more. It seems to take forever to go up but can drop extremely fast. Anyone have any advice on “fast tracking” your credit score to going up? I’m trying to get the best possible rate when I decide to buy a home.
I missed 40, but I think I can do it before I hit 50 if things go my way. I don’t know of any fast way to level up credit, but I would say keeping up with payments would probably be the fastest. I bought this little building about 2 years ago and now it’s halfway paid off. My cred went from non-existance to good, and it might be better than that. all I did was keep up with payments.
Gaming your credit score is a little strange. The only thing with a large positive impact you have immediate control over is the utilization ratio your credit card issuers report to the credit bureaus.
Basically what you want to do is pay your cards down before the statement cuts for the month, because it is the balance on the statement that gets reported to the bureau. You want as much open to buy as possible, as the ratio of used-to-available revolving credit is a large factor in the score.
The only other way I know of to positively game your score is if you do business with a company willing to back-date new accounts. For example, Amex used to (might still, not sure) report the open date of the first account you ever opened with them on EVERY account you open with them. This worked out to make it look like the average age of your accounts was older than it really was, which is a positive factor in your score.
Other than that stuff, yeah- all you can really do is make sure you pay your debts on time and not open too many more accounts than you really have need of.
I would probably have at least 3-6 months pay in a savings account in case something goes down. Tying up money in stocks, IRA, etc can be bad if you don’t have a safety net to fall back on. As far as a minimum amount goes I’d start putting what I can away after the above requirement is met. I’d be taking advantage of my match with my employer if you have a match with your 401k, then I’d invest an IRAs, and finally I’d look into stock trading last as it is the most difficult and risky.
Here is a good guide. I actually hate credit scores because if you do things that make sense from an economic standpoint it can hurt your credit score. IMO it is more of a debt slavery index than an actual measure of if you can pay X debt or not. http://www.clarkhoward.com/get-your-free-credit-score#improve
took about 3+ years to break the 800+ mark. Just pay everthing off and try not to carry a huge balance. keep your lines in use, and gradually over years up your limits on each line. of course not all banks will up limits (capital one im looking at you), but just work with what you can.
I don’t really use my credit card except for booking hotels. Don’t even owe on my credit card. I own my car. I’m big on not owing money so i have been buying things outright. I’m planning on buying a new car in about a year but am planning on buying outright.
I’m crazy frugal as well. Like I never pay full price for a new game. I usually trade something I’m for it or something.
Just charge it and pay in full each month. Paying cash is good but it doesn’t do a thing for your credit history. Once you have that discipline down it gives you a breather for “shit happens”.
Also I tend to make big purchases on credit cards especially since my card has cashback bonus sales with different retailers at different times. I bought a washer and drier when my credit card had a cashback bonus at Lowe’s then paid off the balance a few days later. This allowed me to get money for basically free and I was able to turn around and buy some stuff off amazon with those rewards. These reward programs typically expect you to be stupid and not pay off the balance before your interest cycle hits. If you never carry a balance it is essentially free money. The key is to find cards that offer CASH rewards and not those that have reward point programs. Reward point programs are worthless.
yeah. I used to do that and then it got away from me, so I think I will mainly focus on starting small with cc purchases (game off of amazon or something) and then go from there.
You can compare rates online, unfortunately I don’t think any savings account even exceeds the inflation rate which means you are just losing money the longer you keep money in the account. I think you can get 2% ish if you look around, I don’t think anyone offers much more than that unless you are bringing some serious dough into a savings account. The federal reserve has a firm stance against savers and is pretty much going to punish you for not exposing your money to risk.