Tax Day is less than a month away and people without jobs or facing other economic hardships may find they are in for some surprises this tax season.
Bob Nauert is a finance executive who was laid off and is preparing best he can to pay his taxes.
"There are many of us in this scenario and it's not so much a bad decision but the economic times that are forcing you to do things that you wouldn't have done otherwise," said Nauert.
Nauert says the layoff forced his family to make a difficult decision to pay for his daughter's college tuition. He took out a loan against an annuity. When he couldn't continue making payments, it became income. That income factors in to how he now owes the federal government $14,000.
"It's a challenge right now. It's a challenge for people who are thinking about other priorities in their lives, their kids... thinking about you tax bill is not an enjoyable thing to think about," said Nauert.
Nauert is working with Geoff Harlow, a certified public accountant (CPA).
"People that have been out of work for as long time have to get by somehow so people are searching for sources of money," said Geoff Harlow, Illinois CPA Society.
Among those things that are taxable:
Harlow urges those who owe taxes to work with the IRS even if they can't pay right now.
"The best way to deal with it is to pick up the phone and call the IRS and at least let them know. I think the biggest secret out there is that the IRS will work with people," said Harlow.
Unfortunately for some taxpayers, taxes comes as they are still trying to get solid footing in this recession. Nauert is considering his options to pay his tax bill. Even though he knew this was coming, the challenge remains.
On the up side, there may be some helpful tax items:
Related Information:
- The Center for Economic Progress offers tax assistance to low income families: economicprogress.org
- Ladder-Up has a Tax Assistance Program (TAP) :
- AARP offers free volunteer-run tax assistance : aarp.org
- IRS offers assistance though it's Volunteer Income Tax Assistance Program (VITA) : irs.gov
