You've worked hard all day and come home at night, only to discover that you can't get comfortable in your own bed. You toss and you turn for well over three hours. As 3a.m. approaches, you finally go to sleep but the alarm sounds all too quickly at 6 a.m. It's time for you to go to work. Day two comes and you're off again to the usual rat race. You repeat the same pattern once you get home. Later that night you lay in bed, thinking how you're going to pay all of these bills. Despite your best efforts on the job, including overtime, it doesn't seem to be enough. What can you do? Who can you to turn to?
Does this sound like you? Are you a Christian having sleepless nights because of your finances? Here are the top five reasons I have found why people get into debt:
1) Try to live beyond their means. Keep up with the Joneses. 2) Lost job and bills pile up 3) Have never been taught money management 4) Divorcing and the other party charged up cards in the process splitting up 5) Impulse Shopping
I too was a victim. Not from just one, but two of these debt catalysts. My husband equally had financial woes, his was still on this list. Being in debt has a way of having a hold on you and causes you not to think clearly. People in debt tend to operate out of fear - for example they ignore phone calls because it might be a collection agency on the other end. How many calls have they missed? Or perhaps, they write a check in the hopes that it will clear the bank; knowing full well they spent the money on luxuries and other needless excesses that have caused the bank account to have insufficient funds.
If any of this sounds like you or someone you know, assure them they can get out of debt without filing bankruptcy. They have to want help and not let pride or embarrassment get in their way of being helped.
At Journey To Wholeness, we work with people who want help getting their finances in order. There is no charge for our help. Why would you pay someone to help you get out of debt?
Showing posts with label Because. Show all posts
Showing posts with label Because. Show all posts
Sunday, July 22, 2012
Thursday, May 31, 2012
Will The IRS Tax Me On Income Because Of Forgiven Debts
Imputed income questions are the most asked questions about debt forgiveness because they can be very confusing.
The Internet is a very valuable and influential tool but needs to be used with carefulness. Many Americans are reading information concerning subjects written by people in blogs and websites that have not been researched or based on facts. This becomes one of the major problems for some people who are searching for truth because as the old saying goes, "if lies or misinformation are repeated enough they eventually will be viewed as truth."
The classic articles found online about debt settlement concerning the IRS mentions the "fact" that you will receive a 1099-C and "will" pay income taxes on the amount forgiven as ordinary income. This is true in part but may not the case. What appeared in IRS articles mostly was the declaration on debt forgiveness and it was typically not presented properly.
There are many reasons this is reported this way; typically it comes down to one of two reasons. First the author is just passing on half-truths because they didn't know or didn't care to research the subject. Second the author is using the tax issue to get you to use another method that he or she may be promoting other than debt settlement.
The only truth is right from the "horse's mouth" the IRS. However, many people have no clue where to begin looking and soon become overwhelmed, they cease searching only to trust what they have heard or had read without getting the complete facts.
IRS Section 6050P refers to debt forgiveness. The IRS has specific section code that organizations are required to file with the IRS and which are not. The November 2004 IRS bulletin gives the final review of 6050P and explains the requirements for discharges of indebtedness by organizations that have a significant trade or business of lending money.
Note it's important to recognize that the IRS clearly defines in this bulletin what organizations fall under this class. They also included a section concerning debt buyers, (collections companies). Page 786 mentions there are three harbors safe under which companies will be considered not to have a significant trade or be considered in the business of lending money.
Article comments for the IRS first mentioned the subject of debt acquisition other than from the debtor, in other words the organizational debt collector buying the debt from creditor or credit card company. The commentators seemed a bit confused because of an early proposed regulation 6050P-2(e) which says the debt buyers are considered moneylenders.
The regulations in a 2004 bulletin attempted to clarify the questions about the responsibility of debts for income on debt forgiveness on debts acquired from the debtor or any person other than the debtor when they are subject to reporting under 6050P(c)(2)(D) of the tax code, if the owner of the obligation (debt buyer) is engaged in a significant trade or business of lending money. The majority of debt buyers are just that, "debt buyers" not lenders of money.
The Internet is a very valuable and influential tool but needs to be used with carefulness. Many Americans are reading information concerning subjects written by people in blogs and websites that have not been researched or based on facts. This becomes one of the major problems for some people who are searching for truth because as the old saying goes, "if lies or misinformation are repeated enough they eventually will be viewed as truth."
The classic articles found online about debt settlement concerning the IRS mentions the "fact" that you will receive a 1099-C and "will" pay income taxes on the amount forgiven as ordinary income. This is true in part but may not the case. What appeared in IRS articles mostly was the declaration on debt forgiveness and it was typically not presented properly.
There are many reasons this is reported this way; typically it comes down to one of two reasons. First the author is just passing on half-truths because they didn't know or didn't care to research the subject. Second the author is using the tax issue to get you to use another method that he or she may be promoting other than debt settlement.
The only truth is right from the "horse's mouth" the IRS. However, many people have no clue where to begin looking and soon become overwhelmed, they cease searching only to trust what they have heard or had read without getting the complete facts.
IRS Section 6050P refers to debt forgiveness. The IRS has specific section code that organizations are required to file with the IRS and which are not. The November 2004 IRS bulletin gives the final review of 6050P and explains the requirements for discharges of indebtedness by organizations that have a significant trade or business of lending money.
Note it's important to recognize that the IRS clearly defines in this bulletin what organizations fall under this class. They also included a section concerning debt buyers, (collections companies). Page 786 mentions there are three harbors safe under which companies will be considered not to have a significant trade or be considered in the business of lending money.
Article comments for the IRS first mentioned the subject of debt acquisition other than from the debtor, in other words the organizational debt collector buying the debt from creditor or credit card company. The commentators seemed a bit confused because of an early proposed regulation 6050P-2(e) which says the debt buyers are considered moneylenders.
The regulations in a 2004 bulletin attempted to clarify the questions about the responsibility of debts for income on debt forgiveness on debts acquired from the debtor or any person other than the debtor when they are subject to reporting under 6050P(c)(2)(D) of the tax code, if the owner of the obligation (debt buyer) is engaged in a significant trade or business of lending money. The majority of debt buyers are just that, "debt buyers" not lenders of money.
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