Chicago Bankruptcy Lawyer Blog

When you're out of work and without a paycheck, finding a new job can feel like it's taking forever - especially when you're also struggling to pay your credit card bills and the mortgage. But all that legwork can pay off in more ways than one.

Of course, the best case scenario is that you find a well-paying job quickly. But even if you don't, you can get a financial break in the meantime by deducting money you spent on your job search, say Chicago bankruptcy attorneys.

Despite the debate over if or when the economy will recover, millions of Americans remain jobless. Those who have been out of work for six months or more were recently cut off from jobless benefits for seven weeks during a congressional standoff that ended last week. But what didn't get cut off is a series of tax deductions for job searches.

Continue reading "Tax Breaks Help Unemployed Chicago Workers Pay for Job Search" »

A tax credit is a nice incentive if you've been thinking about buying a house. But a tax credit alone doesn't mean you're ready, caution Chicago bankruptcy attorneys.

Many first-time buyers have been rushing to take advantage of a credit of up to $8,000 (or $6,500 for existing homeowners who have lived in their current house for five or more years) since, in order to qualify, buyers must sign a contract by the end of April - this month.

But don't worry if you don't make the deadline - and don't rush if you're not ready. Unlike first-time homebuyers were mistakenly led to believe last decade, home buying isn't a walk in the park. Taking the time to have your financial ducks in a row first goes a long way towards ensuring a smooth buying process. In fact, in the long run it may save you more money - and heartache - than any homebuyer tax credit.

Continue reading "Chicago Homebuyers Should Get Finances In Order Before House Shopping" »

Wondering what to do with the tax refund you're getting this year? Maybe it's time to take a cue from the majority of Americans and pay down debt.

This year it's not about splurging on a flat-screen TV or a weekend getaway. More than 40 percent of consumers are going to use their checks from Uncle Sam to lower debt, according to an annual survey by the National Retail Federation. Some plan to sock away the refund in a savings account; other will use it to help pay the bills. Only 10 percent will take that dream vacation.

Now, you might be thinking using your refund responsibly sounds like all work and no play. But that's not true. Putting your windfall towards your debt can mean more play money in the future.

Continue reading "Paying Down Debt with Bankruptcy Can Stretch the Tax Refunds of Chicago Taxpayers" »

Maybe you can't lower your mortgage - but what about your property taxes?

As much as 60 percent of homeowners are paying thousands more in property taxes than they need to, according to Msnbc.com. Why? Their property taxes are being assessed based on the value of their home before the housing bubble burst.

Property taxes are typically reassessed every 3-5 years. If 2007 was the peak of the market, that means you might still have a couple years to go - and counties are dragging their feet on the reassessment process because, let's face it, they could use the extra money.

But you don't have to wait for the county. You might be able to lower your taxes - and thus increase your income - with an appeal.

Continue reading "Chicago Homeowners Might Be Able to Lower Property Taxes with Assessment Appeal " »

The IRS might not be the only group taking your money this tax season.

A growing number of scam artists are preying on the desperation of stressed-out taxpayers to make a quick buck, according to Chicago bankruptcy lawyers. Sometimes it's by promising you an easy way to lower your tax bill. Other times it's by impersonating IRS websites. Either way, scammers are on a mission to get your personal information - and your money.

With credit card debt, a mortgage or rent payment and a maybe even an impending tax bill, you've got enough to worry about. Fortunately, it's a cinch to avoid tax scams - you just have to know what to look out for.

Continue reading "Common Sense Can Help Chicago Taxpayers Fend Off Scams This Tax Season" »

Many Chicago taxpayers are thanking the economic downturn for at least one thing this year: a tax refund. But what if you're one of the millions of struggling Americans who still owe Uncle Sam?

Fortunately, you've still got options. Not included in those options? Not filing. Putting off your tax bill will only make things worse, as IRS penalties can accumulate faster than you can count them. Not only that, but tax debt can lead to a ruined credit score, garnished wages and sometimes even jail time. The IRS is no ordinary collection agency and they will make you pay sooner or later.

But the same things that make the IRS different can also work in your favor. Unlike most creditors and debt collectors, IRS agents usually reward communication. If you can't pay right now, don't ignore the situation - explain it. As long as you file your taxes, you might be eligible for the following solutions.

Continue reading "Bankruptcy Can Help Chicago Taxpayers Pay Off IRS Debt " »

Who wouldn't want to get a $6,500 tax credit this year? Apparently the many folks who can't afford to buy another house, say Chicago bankruptcy attorneys.

In November, the federal government updated its homebuyer tax credit - which was originally meant to help renters buy their first home - to include current homeowners as well. The idea was to encourage homeowners to upgrade to a new house, hopefully stabilizing prices and boosting the sluggish real estate market in the process.

But homeowners aren't biting - mostly because they can't afford to. With unemployment up, home values down and foreclosure looming, homeowners might find better benefits from another strategy: Chapter 13 bankruptcy.

Continue reading "Chicago Homeowners Find an Alternative to Foreclosure With Chapter 13" »

So you lost your job last year and picked up some unemployment benefits. Once you find employment, you're out of the woods, right?

Not necessarily, say Chicago bankruptcy attorneys. Unemployment benefits sure come in handy when you need to put food on the table. But they can also cost you. As it turns out, unemployment benefits are taxable after the first $2,400 - or $4,800 per married couple. After that amount, you'd better start treating those payments as income, because they'll be taxed that way. Not sure how much you received last year? You should receive a Form 1099-G in the mail, which you'll need to report on your 1040.

Fortunately, there are ways to offset some of the damage - and not just of unemployment benefits, but of any surprise tax.

Continue reading "Chicago Bankruptcy Attorneys Recommend Cash Cushion For Tax Season" »

The early bird gets the worm - and sometimes the tax refund.

Just because tax deadline day is April 15 doesn't mean you have to wait until then to file, according to Chicago bankruptcy attorneys. Sure, most of us look at the filing process as a chore to be put off until the last possible minute. But with all sorts of new credits and deductions added to stimulate the economy, you might want to get it over with early and get some money back in your pocket sooner rather than later, especially if you're in debt.

Continue reading "Chicago Bankruptcy Attorneys Point Out Benefits Of Early Tax Filing" »

Remember that stimulus package the government enacted back in February? Well, apparently Uncle Sam got a little too generous.

It's just been announced that up to 15 million taxpayers could owe some of that stimulus money back next year. Why? Under the Making Work Pay tax credit, most working Americans had less withheld on their paychecks, resulting in extra take-home pay of about $60 a month. But when the government changed its withholding tables for the new system, it didn't factor in things like whether someone was married to a working spouse, held more than one job, was retired with income taxes withheld on their pension or was a college student still being claimed as a dependent on their parents' taxes.

So let's say you have two jobs, each one earning at least $20,000. That means you could have been credited twice - and will owe half of that money back to the government on your income taxes. If you're owed a tax refund, that refund will simply be reduced. But if you owe taxes, you'll also have to pay all that stimulus money back to Uncle Sam come April. Fortunately, there's a way to help ease the pain of such nasty surprises.

Continue reading "Some Employees May Have to Pay Stimulus Money Back" »

What's the only thing worse than not paying your taxes? Not filing at all.

This Thursday, Oct. 15 is the final deadline for the whopping 11 million U.S. taxpayers who filed for an extension on their 2008 return. With the economy still down in the dumps, many folks haven't seen an anticipated improvement in their finances - consequently, some are opting to simply ignore the deadline and not file.

Here's why that's a mistake. You might be able to get away with ignoring your creditors for a while, but you can't ignore Uncle Sam. If you don't file, you're immediately going to start incurring fees - these late penalties can be up to one-quarter of your total obligation. Before you know it, your debts could be doubled or tripled. You may even face jail time.

But there's a simple - though maybe not ideal - way to avoid all that.

Continue reading "Tax Extension Filing Date This Thursday" »

Uncle Sam is in a bind - and he might require your help.

To aid the federal government in covering its $1 trillion dollar deficit, the IRS has ramped up its focus on individual workers, small business owners and the self-employed in the form of "soft letters" and tax audits.

If you haven't reported all your taxes, made a mistake or otherwise raise a red flag at the IRS, you might get a "soft letter" - a polite but serious notice encouraging you to refigure your taxes. Your best bet is to quickly comply because, if the IRS doesn't get its funds, their next step is to mail a correspondence audit - a letter demanding payment for a certain item (sometimes more than you really owe) - or, even more scary, send out an agent for an actual audit.

Continue reading "Chicago Bankruptcy Lawyers Warn of IRS Tax Audit Increase to Cover Debt" »