What to Do With 1099-C
You may have received 1099-C if you had debt cancelled since cancelled debt is considered taxable income. You can add this to your eFile account to generate the needed forms and add it to your taxable income.
What does this form look like?
You should be sent a Form 1099-C when $600 or more of a debt you owed is cancelled; the financial institution should follow specific IRS guidelines to be sure the form is sent to you when this happens. Follow the steps below to add your cancelled debt to your return so taxes can be calculated on this income.
2. Where Do I Enter Data?
eFile will guide you through entering all types of income. You will come across adding the information from your 1099-C as you work through the Federal Taxes section and the proper forms will be generated for you. You are asked about Form 1099-C under Income > Other Income.
3. How to Manually Add Data
To manually add your form, navigate to Federal Taxes > Review > I'd like to see the forms I've filled out or search for a form and enter "1099-C" to add the information from your cancelled debt form. In most cases, this cancelled debt should be counted towards your individual income. Select 1040 - Individual Return from the flow dropdown to include this with your individual income.
4. Box Descriptions
There are many boxes on the form and you will want to enter boxes 1-7 into eFile:
1: Date of identifiable event
2: Amount of debt discharged
3: Interest, if included in box 2
4: Debt description
5: Checkbox for if the debtor was personally liable for repayment of the debt
6: Event code
7: Fair market value of property.
5. How to Add, Delete a Form or Page
TurboTax® is a registered trademark of Intuit, Inc.
H&R Block® is a registered trademark of HRB Innovations, Inc.