Taxable Forgiveness

Student loan forgiveness is taxable again: Start planning for the 'tax bomb,' CFP says

This headline warns that student loan forgiveness, which was temporarily tax-exempt under the American Rescue Plan, is now once again subject to federal income tax. Financial planners are advising individuals to prepare for a potential 'tax bomb,' as the forgiven amount will be treated as ordinary income, potentially leading to a significant tax liability for those who receive forgiveness.