Updated IRS issues 1099? Is consolidation taxable income?

Hi

Welcome to the forums.

The amount saved in consolidation is considered as an income. When a person is paid on the form 1099, the person earns the money on an untaxed basis. So it becomes his responsibility to pay the exact taxes to the Federal, State and local governments.

Thus, during the computation of the taxable income, it is necessary to include the amount figured in consolidation.

Regards
Roxette

Thanks for the reply! :)

Would this be spread out over the "3 years" or is it a lump sum? For example, if you save 60% on $20,000 this year, would you be responsible to pay taxes on $12,000 this year or would you be responsible to pay that money as each debt is paid off?

What constitues income, the actual agreed upon savings or the actual payment of that ammount?

It seems like it would be a hardship to save $10,000 only to pay $4,000 in taxes all at once next year.

I will suggest you to take advice of your tax consultant. He will map the items in the required categories of your income tax calculations.

You won't have to pay that much amount only in taxes. There are various slabs of taxable incomes and you will have to pay a certain percentage of it only.

Your tax attorney will be surely explaining this better. :)

Regards
Roxette