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When you think about your credit cards, you probably don't think about taxes. However, there can be some tax implications when it comes to your credit cards. For some of us, the way that we use our credit cards could add to the amount that we're able to deduct from your tax return. For others, credit cards may increase your yearly income and cause a tax debt. You may not realize this fact until you receive a tax form for your credit card in the mail.
Interest and Deductions
There are some interest deductions that you're able to take off of your taxes. Interest on your mortgage, student loans, and similar debts may be written off depending on if it's ...
If a credit card company charges off your debt, it gives up on receiving repayment and chalks up the amount as a loss. However, this doesn't mean you're no longer responsible for the debt in question. Not only can collection agencies sue you for repayment, but you will also see a decreased credit score and may even face tax consequences. Here's what you need to know about how credit bureaus and the IRS treat a credit card write-off.
When Is Credit Card Debt Written Off?
Typically, a so-called charge-off occurs after you've failed to make a credit card payment for at least 180 days.
When Does a Write-Off Have Tax Consequences?
Sometimes, the credit card company will cancel the charged-off ...
When you have parents in debt, offering help or advice can be a sensitive subject. It's natural to want to support the parents who helped you get where you are today. However, offering financial assistance goes way beyond simply paying off your parents' back tax debt, credit card debt, or other major obligations. Discover what to do if your parents are in financial trouble. Learn how to help your parents get out of debt without using your own money.
Image via Flickr by frankieleon
Give Time Instead of Money
Upon realizing that your parents are facing insurmountable debt, your first instinct may be to give them as much money as you can afford to offer. After all, loaning to your ...
Debt seems to be the one thing that Americans have in common. Almost everybody, from the working poor to multi-billionaires, has accumulated a staggering amount of debt they need to pay off. But people often struggle to do so because they are unaware of all the debt relief options available to them.
Americans have amassed $1.3 trillion in student debt alone, with 44.7 million people owing an average of $37,172, according to the Federal Reserve. But this is just the tip of the iceberg; U.S. households owe $1 trillion on credit-card and auto loans.
Not surprisingly the average American household owes $132,529 in debt, an amount that has increased by 11% (or $14,578.16 per household) over the past 10 years.
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One of the biggest threats to average Americans’ economic future is uncontrollable debt obligations. The average American household owes close to $140,000 in debt, U.S. consumers are now $3 trillion in debt, and $1 trillion of those obligations consist of credit card bills.
Sadly, many frugal and responsible people find themselves overwhelmed with debt obligations. Often because of circumstances beyond their control such as job loss, pay cuts, bad health, business failure, divorce and just plain bad luck.
Many of these people end up using 25% or more of their income to pay off debt. This often leaves them with little money to pay for essentials like food, and no savings to deal with emergency expenses such as car repairs.
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Debt reduction services, also known as debt settlement companies, often seem like a dream come true. Once you meet with them and share your financial struggles, they promise to negotiate with your creditors, consolidate your bills, and help you get out of debt. Many of these companies even promise to make your debts disappear, guaranteeing they can help you settle for 30 - 50 percent of what you owe.
Unfortunately, these services aren't always what they seem. As the Consumer Financial Protection Bureau (CFPB) notes, working with a debt reduction service may even leave you deeper in debt than when you started.
Debt Reduction Services: 5 Truths to Consider
Before you sign up for help with your debts, it's important ...
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