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  1. #1

    Default Receiving Taxable Income While Collecting SSI

    I am currently on SSI. If I receive a 1099-C for an old credit card that was used for dental and medical purposes before I was on SSI and the amount of the 1099-C is my only reportable income and I cannot file for an exemption, how much of it is taxed? Is the threshold amount for filing subtracted from the total of the 1099-C? In other words if an individual is required to file if her/his income is greater than let's say $9,500.00 (USD) will the latter be subtracted from an $11,500.00 1099-C?

  2. #2
    Join Date
    Sep 2010
    Posts
    19,670

    Default Re: If a 1099-C is Only "Income"

    The filing threshold is *NOT* subtracted from the amount, but after your personal exemption and standard deduction, you're probably getting close to the same amount.

  3. #3

    Default Re: If a 1099-C is Only "Income"

    Thank you for your quick reply

  4. #4
    Join Date
    Sep 2012
    Posts
    1,988

    Default Re: If a 1099-C is Only "Income"

    do you have any assets to speak of? (vehicle with significant value, real estate, etc?)
    according to IRS PUB 4681
    http://www.irs.gov/publications/p4681/ch01.html

    http://www.irs.gov/publications/p468...link1000192027

    it looks like you would likely meet the insolvency criteria for most or all of the value of the cancellation, if you have trouble going through the instructions and worksheets you may need to take the info with you to a VITA site at tax time, they don't charge and you will definitely qualify for help VITA is open to anyone making 51k/year or less

  5. #5
    Join Date
    Oct 2006
    Posts
    16,197

    Default Re: If a 1099-C is Only "Income"

    Quote Quoting Lehk
    View Post
    do you have any assets to speak of? (vehicle with significant value, real estate, etc?)
    according to IRS PUB 4681
    http://www.irs.gov/publications/p4681/ch01.html

    http://www.irs.gov/publications/p468...link1000192027

    it looks like you would likely meet the insolvency criteria for most or all of the value of the cancellation, if you have trouble going through the instructions and worksheets you may need to take the info with you to a VITA site at tax time, they don't charge and you will definitely qualify for help VITA is open to anyone making 51k/year or less
    Based solely on the fact that he/she is on SSI, its nearly guaranteed that he/she was insolvent at the time that the debt was cancelled. SSI is means tested and is not granted to anyone with any kind of significant assets.

    It would only take about 2000.00 of insolvency, plus the standard deduction and personal exemption to render the 1099-C untaxable.

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