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Hi, I can help with this
Although quite honestly you're quite knowledgable....you are right that you'll have to file in one of the Marries statuses MFJ, MFS
Hi. Can you help with this even if I am required to file a NC Tax Return as well?
FIrst lets take the 1099s
the 1099 A is not reporting income
The 1099a is reporting the following:
Its provided to let yuo show the "sale" of the home on a schedule D and report a gain or loss
the 1099C IS reporting ince (the forgiven debt)
sorry ... IS reporting "income" ... the 1099C
and yes, you should file a tax return for a couple of reasons
Balance of principal outstanding: 297,146.89 in box 2. Fair market value of proeprty in box 4: 321,200.00 ( I disagree with this value; i called them and they stated based on bank's internal appraisal of property). Box 5 checked personally liable.
(1) you can attach form 982 andunder the Mortgage Debt forgiveness act the income iws waived ... but you can't do that unless you file a return
Remember that since this was your rimary residence.....
you can exclude up to 250,000 (500,000 MFJ) of gain ... so there's no problem there
and again, the 982 will waive the taxes on the forgiven debt from the 2nd mortgage
Should we continue because remember i don't want to file jointly with separated husband and be responsible as I have no income:
you can certainly file separtely
tat's one of the few good reasons to file separately
financially, MFJ can make more sense ... but
if you feel that he's irresponsible and there could be problems on his side them, MFS is the way to go
Have you heard of the low income tax clinics?
The second mortgage was used for paying off credit card debts. The home sold at foreclosure for 265,000.00. The husband won't give me any form to say he will be responsible for any taxes due. Well how do I file separately, plug in all numbers from original mortgages, closing statements, refinanced mortgages, etc. I have heard of low income tax clinics but not one in Fayetteville NC WHERE i am.
you can file electronically for free at the IRS site and (let me look, here) bu I think NC has something similar
And yes, you just check the Marriel Filing Separately box on the return
If you can handle buying a copy of turbo-tax, it has an interview where you just answer the questions along the way
If I pay for turbo tax myself and use that I believe i can get free answers to questions. Should I do that? I really don't have two nickels to rub together. I am 56 years old and have not been able to get a job. Do I need to file NC as well. There is no child support agreement for my son, husband sends what he wants, when he wants. Basically i feel my mother supporting us.
Also, if you DO fle separately, you're basically forcing hm to do the same
he would have to FORGE your signature, to file jointly
Yes, (please don't shoot the messenger here, but because IRS and NC dept of revenue get a copy of those 1099s they will be looking for some reporting BUT AGAIN, you won't owe anything
One thing that Might help ....
IRS rules also state that if I file separately, he must also. Also, I can not itemize because i have no income. It states that both must file the same (eg itemize both). I was thinking to file the form claiming the indigency exclusion if need be because I am .
If your mother has income, and can claim you and your son as dependency exemptions under the QUALIFYING RELATIVE test, you may be able to help her generate refunds
Since I can't itemize due to rule that both must have income. Will that also force him to take standard deductions, right?
Since I am in NC and he is not then all bill collectors have filed liens against me, attached bank accounts, etc.
AGain, you're just filing to reconcile the reporting .... If you have no income, there's no need to worry about trying to lower your taxes
Ok slow down a bit and hang with me here
Look at this ... (everyone gets a standard deduction and a personal exemption) THe amount depends on your filing status ...See this:
so you can see wht FINANCIALLY the married filing separately almst never makes senses .... a threshhold of 3800 each as opposed to a household of19,500
Well I know that but even if I would get a refund, NC already sent me a letter stating they will intercept all tax refunds.
I was just trying to get to a point where I could address your earlier questions about filing options
The botXXXXX XXXXXne here, if you don't file you be in even deeper
well i feel my husband can't be trusted and he is only trying to lessen his tax burden even though he hasn't done the right thing as far as support. he won't even give me an income statement so i can get medicaid.
IRS and NC will start to be after you about this additional 1099 and apparent gain on a sale
If you simply file, that all goes away
982 to waive the 1099C and exclude gain as personal residence on the 1099A
Again, if you aren't making any mony the FINANCIAL reasons for filing jointly apply (AND if he isn't)
So basically your advise is to file married separately, claim my child, and all forms. Do you think I need to file the form for indigency listing all assets/liabilities before foreclosure?
If the house was your oprimary residence you dont have to do that
that's only for investment property
you'll be waived under the mortgage forgiveness act because it was your primary residence
By the way nothing was provided to me from bank regarding how much the foreclosed home was sold for, i discovered this myself. Does that 265,000. auction price come into play anywhere with the tax forms needing to file. Also, the value they placed is certainly way over the top of what it was worth at the time:
you didn't have more than 250,000 of gain
ok thanks. and will owe nothing on the cancelled debt by second mortgage even though used for credit cards?
that's right ... as long as it was secured by the home
use form 982
or if you use turbo tax it will generate the form itself from the answersw to your questions
It was secured by home. But why did they not check that I was personally liable to rePAYMENT OF DEBT. Was this because it was secured by home?
YEs, it's because of the loan agreement
But what makes it forgivable is that very fact
AND the fact that it was secured by your primary residence
Sorry ... the reason the DIDN'T check that was because the debt has been forgiven
That;s what' causing taxation
forgiveness of debt is taxable income
BUT becausethe mortgage act was extended you can waive those taxes this year with form 982
Ok. Thanks for the clarification. And again, if I file separately, and can't itemize because of no income then husband will be forced to take standard deduction. So I will owe taxes due to the second mortgage and the cancelled debt:
Ok didn't see your last sentence until after i sent last.
All is right except that if you file form 982 with your return you won't owe anything on that forgiven debt
Is form 982 the form for indigency that i spoke of?
Technically, you do owe taxes... BUT the mortgage act lets you waive the tax liability
it IS, but again, only thos who are asking for forgiveness of tax debt on NON-residence home need to fill out that part of the form .... you only have to complete the very top where you state that this was your private residence .... insolvency desn't come into play here
sorry PRIMARY residence
ok good less paperwork. nc is going to be harder because their requirements are different.
May not be as ba as you think
If you use TTax
you'll notice that most of the input is for federal
whan you click the button to do state, everything just fows to the state return
The program will walk you through some adjustments ,,,but MUCH easier than trying to crank out the whole state return by hand
I just want it to be right and done with, so i can get back to trying to get employment.
By the way, last year i filed jointly federal and did not file nc return because i had no income and he did not live in nc. Do you think i did it right?
i think you have enough awareness of how it works now, that you can work through it with turbotax OR if you want me to give you the Low Income Taxpayer Clinig number ... you'll be able to talk with them in an informed way
YOu were probably below the filing thresshold
That would be great.
Hang on if you will and I'll chec NC
Can you send me transcript to email so i can refer to when i get into doing the return?\
First, here's this
Low Income Taxpayer Clinics (LITCs)
Legal Services of Southern Piedmont, Inc. www.lssp.org
North Carolina Central University School of Law
you can (1) save this as a favorite place (bookmark) and it stays here for you forever or (2) copy and paste into a word file ...or (30 you can print from your browser
They won't let us Email or phone in order to protect privacy/anonymity
ok thank you very much. I am so glad i found this service, it has been worrying me too death. One last thing, did you see my questions re last year's tax return?
Yes, I was trying to see if NC has a threshhold... I did see that the first dollars is a 6% (they really are aggresive aren't they) i you can heang with me I'll keep looking
Also, I just found this video from the IRS taxpayer's advocate office about using form 982
ok i already looked at that video from advocate office.
so ... if no income .... no need to file last year
here's the link for that
well see i was nc resident all year without income. he was not nc resident so that is why i filed jointly with him using florida address.
I doubt you hear anything from them for last years as you didn't have any income reported
It's this year thatm filing the return will will all this to bed
I will just remember the wo important pieces....
(1) capital gains are excluded for primary residence
(2) the tax on fogiven debt is waived with form 982
Filing, is what will make it (this year's 1099s) go away
thanks again for the clarification. I researched and read everything but I just wanted a professional's opinion that I am doing the right way.
(and there's really a sub-part to number (2) ... if it was your primary residence you don't have to prove insolvency
You're very welcom
I commend your being proactive ... the stress will start to go away as your working through it
If that's all for today ....
I would appreciate either an “accept” or a feedback rating of 3 (OK) or better. That's the only way they will pay us here
But again be sure to bookmark this... that way you can come back for the links, tables and phone numbers, etc.
yes ok have a great day!