Johnson, Agen, Kupferschmidt & Associates

Tax Tips

June 2009

WHAT IF?

WHAT IF I LOSE MY JOB? The loss of a job may create new tax issues. Severance pay and unemployment compensation are taxable. Payments for any accumulated vacation or sick time also are taxable. You should ensure that enough taxes are withheld from these payments or make estimated tax payments to avoid a big bill at tax time. Public assistance and food stamps are not taxable.

WHAT IF MY INCOME DECLINES? There are many tax credits that are subject to income limitations. If you had a reduction in income in 2008 you may be eligible for some credits or deductions. For example, the Earned Income Tax Credit is available for working families and individuals. Eligibility is determined by income and family size.

WHAT IF I LOSE MY HOME THROUGH FORECLOSURE? Under the Mortgage Forgiveness Debt Relief Act of 2007, taxpayers generally can exclude income from the discharge of debt on their principal residence or mortgage restructuring. In some cases, you may be able to file an amended tax return for previous tax years.

ENROLLED AGENTS
We are proud to be your local Enrolled Agent. EAs (Enrolled Agents) are the only tax professionals tested by IRS on their knowledge of tax law and regulations and are licensed by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the IRS.