Cannot Use Pretty Permalinks

I have spent an embarrassing about of time on this problem and have read post after post without fixing it. I am trying to select another option other than default for my permalinks. When I do I get a message telling me to update my .htaccess page with the code to put into it. I don’t have one, so I create one, name it 1.htaccess, upload it to my root directory, rename, then add 777 permissions. I go back to my control panel and click on Change Permalinks but now I can’t because I get the message

IIS Password, Page cannot be displayed, HTTP 500

. The only way to move around on the control panel then is to remove .htaccess file but then I’m pack to ugly links.

I checked with my server(IIS 8) and mod_rewrite is enabled. I’ve also tried creating a web.config file but that didn’t work either.

Any suggestions would be much appreciated.