Losing a job may create new tax issues for you and your family. If you or a family member loses
a job, be aware that the following items are taxable:
- severance pay
- unemployment compensation
- payments for any accumulated vacation or sick time
Public assistance and food stamps are not taxable.
To avoid a big bill at tax time, you should ensure that sufficient taxes are withheld from these payments or made via estimated tax payments. The IRS Withholding Calculator can help you determine whether you are having too much, or too little, federal income tax withheld.
If you believe you may have trouble paying your tax bill, there are steps you can take to help ease your burden. First and foremost, you should file a tax return even if you’re unable to pay so you can avoid unnecessary penalties and interest. For additional steps, see 11 Tips for Taxpayers Who Owe Money to the IRS.
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For immediate assistance with your IRS or State tax matter, contact us today at 1-714-382-6780 for a FREE and CONFIDENTIAL consultation with our CPAs and former IRS Agents.
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