In TurboTax, you should be able to search for "1099-C" in the search bar at the top. It'll take you to the income section where you can enter the form. After entering the basic 1099-C info, it should ask if you qualify for any exclusions. Select "insolvency" and it will walk you through the worksheet. If you're using the desktop version, it's under Federal > Income > Less Common Income > Cancellation of Debt. Make sure you're in the full interview mode, not the quick mode, or it might skip some options.

That's a really good point I hadn't thought about. My mom is on Medicare with the extra help subsidy for her prescriptions. Do you know if canceled debt that's excluded due to insolvency still affects the MAGI calculation for Medicare subsidies?

For Medicare subsidies, if you properly exclude the canceled debt from income using the insolvency exception (Form 982), then it shouldn't affect the MAGI calculation for Medicare's Extra Help or Medicare Savings Programs. The key is making sure you complete Form 982 correctly to exclude it from your gross income in the first place. However, if only part of the debt is excluded due to partial insolvency, the remaining taxable portion could potentially impact your MAGI. I'd recommend contacting your local SHIP (State Health Insurance Assistance Program) - they provide free counseling on Medicare issues and can give you specific guidance for your mom's situation.

This is what worries me! Did you have any issues with them properly applying your payment when you made it before they processed your return? And how did you figure out the exact amount with penalties?

No issues with them applying the payment - I paid through the IRS Direct Pay system and selected the correct tax year and form type. The payment posted correctly once they processed my return. As for calculating the exact amount with penalties, that was the tricky part. I didn't know how to do that accurately, which is why I ended up with a small balance due notice later. If I could do it again, I would either pay a bit more than I thought I owed to be safe or use one of the services others have mentioned to get a more precise calculation.

Try early morning (like 6-7am) or late evening. Their site gets overloaded during peak hours. Also clear your cookies or try a different browser. Their site is notoriously bad with certain browser versions.

Thanks for the tip! I'll try early tomorrow morning. Been trying in the afternoon and it's been completely useless. Their tech is so outdated it's ridiculous.

9 I think your tax preparer might have been wrong. I had the same situation and called the IRS directly (using that Claimyr service someone mentioned) and they told me the preparer was incorrect. The advance payments need to be reconciled on the return of whoever is claiming the children as dependents, regardless of who received the payments. You might have unnecessarily complicated your taxes.

16 You might be right. After reading all these responses, I looked into it more and it seems like my preparer may have been overly cautious or mistaken. According to IRS Publication 1054 (which I just looked up), the person claiming the qualifying child should report the advance payments. Looking back at our returns, we may have done it wrong and I'm going to ask about filing an amended return. Thanks for bringing this up - sometimes even paid preparers make mistakes with unusual situations.

17 I used TurboTax last year for this exact scenario. It actually handles it pretty well - there's a specific section where it asks if you or your spouse received advance Child Tax Credit payments. It then asks you to enter the amount from Form 6419 regardless of whose name is on the form, as long as you're claiming those children as dependents. It was surprisingly straightforward!

I know credit card debt isn't ideal, but it happened after some medical expenses that weren't fully covered by insurance. I've actually been looking into balance transfer offers like you suggested. Do you have any recommendations for specific cards that have good 0% offers right now?

I don't want to recommend specific cards since offers change frequently, but look for cards offering at least 15 months at 0% APR on balance transfers. Pay attention to the balance transfer fee (usually 3-5% of the transferred amount) and factor that into your calculations. Credit unions often have personal loan rates significantly lower than credit card interest rates if the balance transfer doesn't cover everything. The key is to make a plan to pay off the debt during the 0% period, or you'll just end up back in the same situation when the promotional rate expires.

This is actually a really good point that I never thought about. The tax code is basically a list of things the government wants to encourage.

Exactly. Once you understand that the tax code is more about shaping behavior than being "fair," you can make more strategic financial decisions. If you're going to borrow money anyway, might as well do it in ways that come with tax advantages when possible.

4 Do you think coaching books or online courses would count as deductions? I've spent around $200 on coaching materials this year that help me plan practices.

9 Absolutely! Coaching books, online courses, and training materials that help you in your coaching role are typically deductible as ordinary and necessary business expenses. They're considered professional development expenses that directly relate to your work. Just keep receipts and documentation that shows what the materials were and how they relate to your coaching business. Digital receipts work fine too, just make sure you have a system to keep track of them.

12 Where on the forms do you deduct the 50% of self-employment tax? I've been filing 1099 income for 3 years and never knew about this!