Taxes and Gift Horses

What do they say about looking a gift horse in the mouth? When given a horse, it would be bad manners to inspect the horse’s mouth to check its age and condition. This analogy can be applied to any gift. Student loan debt is over trillion dollars, and many loan forgiveness programs have sprung up to assist borrowers who go to work for qualifying employers like the government and 501 (c) (3) nonprofits. Those borrowers may face an unexpected surprise. Sometimes the debt amount forgiven is considered taxable income by the IRS! Yes. Having $50,000 of student loan debt forgiven would be nice for the dedicated teacher or social worker. But what about the $12,500 of additional taxes that comes with it?

When it comes to taxes, school is never out.  So, email us at info@coloradotaxcoach.com before you apply for any debt relief and let us help you with the planning you need.