In these pressing economic times... we're all fighting to keep our heads above water. I know you've been reading this everywhere, but it's true. Until things get better, we all just have to stay prepared. Here are some ways to stay out of Tax Debt during an Economic Downturn.
I lost my job, what should I do?
Losing your job may spark new tax issues, even if you don't owe the IRS. Public assistance like food stamps are not taxable, that's good news. However, Unemployment, Severance pay, and even accumulated vacation or sick time are taxable. Here's where you can report unemployment taxes:
-Form 1040 line 19
-Form 1040A line 13
-Form 1040EZ line 3
I can't pay my Taxes by April!
Don't panic! You still need to file your taxes. If you don't, the penalties and interest will eat your bank account alive. So here's the game plan:
-File your taxes
-Work with the IRS for a payment plan
-Or work with an attorney/Tax Resolution company that can solve your case for you
Whatever you do, do not ignore your debt.
My income has fallen, what should I do?
A pay cut is always a terrible strain. But there is some good news, with a lower income, you might qualify for an Earned Income Tax Credit (EITC). The EITC is a refundable federal income tax credit for low to moderate income working individuals and families. With any luck, you could earn money and not owe money.
Still lost? Do you have a specific issue that needs resolution? If your research isn't giving you the answers you need, consider working with an attorney or third party to relieve you of your Tax Debt issues.