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SSA.Help4u.168
SSA.Help4u.168, Accountant
Category: Social Security
Satisfied Customers: 3444
Experience:  Tax Accountant
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I am on social security disability and received a 1099-c for

Customer Question

I am on social security disability and received a 1099-c for next year. Will I have to pay social security tax because my income is more than $25,000? The 1099-c is for $59, 921. My wages are $9000. My social security disability is $11,328.
Submitted: 1 year ago.
Category: Social Security
Expert:  SSA.Help4u.168 replied 1 year ago.
Thank you for contacting us today. My goal is to provide efficient assistance to you and hopefully a peace of mind as well.
You may meet an exception and not have to include the 1099-C income. What type of debt is the 1099-C for? Are you insolvent? Have you file BK?
If you meet one of the exceptions, you will not need to include the 1099-C income. However, if you do not meet an exception and have to include the income, it is likely that a portion of your social security (up to 85%) can be taxed. SEE BELOW:
Canceled debts that meet the requirements for any of the following exceptions or exclusions are not taxable.
Debt Cancellations or Reductions that Qualify for EXCEPTION to Inclusion in Gross Income:
Amounts specifically excluded from income by law such as gifts, bequests, devises or inheritances
Cancellation of certain qualified student loans
Canceled debt, that if it were paid by a cash basis taxpayer, would be deductible
A qualified purchase price reduction given by a seller
Any Pay-for-Performance Success Payments that reduce the principal balance of your home mortgage under the Home Affordable Modification Program
Canceled Debt that Qualifies for EXCLUSION from Gross Income:
Debt canceled in a Title 11 bankruptcy case
Debt canceled during insolvency
Cancellation of qualified farm indebtedness
Cancellation of qualified real property business indebtedness
Cancellation of qualified principal residence indebtedness
REFERENCE SOURCE:
http://www.irs.gov/taxtopics/tc431.html
Let me know if you require further assistance with this matter.