Posted by LWM Team on Tue, Feb 09, 2010
So you have been working yourself to death making payments on past due taxes owed and now this year you would have BUNCHES coming back...but not for you. You are an I.R.S. delinquent tax payer. Go ahead, jump off the porch roof, scream a little with the figures of money dancing in your head but, alas, it's not to be! No $200 or more one-time economic rebate and no earned income credit no matter how bad your little beasties have been this year. The I.R.S. isn't Santa Claus and you don't even get a box of rocks!
Keep Up the Payments
You've got NADA coming back and you must file, so why hurry? They know when you file that you have a refund that will go for the arrearage of your taxes...so why not just let them wait a bit? Because you are still liable for on-time payments until they actually credit your account with your refund amount...and that can take several weeks, even after other people get their refund! So don't drag your feet...especially if your refund may wipe out your debt, which incidentally is gaining interest daily!
Are There MORE Wee Little Debts You Owe?
Not only will the feds get what you've got coming from refunds or rebates, they will also collect swiftly on any student loans, state or federal taxes and any past due child support you owe. The eyes are upon you and NOTHING gets past the feds!
Don't even THINK about just not filing because you owe past due payments. Interest and penalties will KILL your credit! Not paying might seem like sweet revenge but you're the loser when payments aren't credited quickly, not the IRS!
Posted by LWM Team on Thu, Jan 07, 2010
It's an unfortunate aspect of life however child support is something that many parents have to deal with on a monthly basis. No one likes talking about the nitty gritty details since monetary concerns are already a bit on the taboo side of things and the situation around child-support just makes it more uncomfortable. It is important to educate yourself however on the child support tax laws as they apply to you so that you can make sound financial decisions to protect you and your children's financial future.
The good news is that there is no such thing as child support tax. It's not considered income and thus is tax neutral. The individual paying child support does not get to use it as a deduction on their taxes therefore they are already paying the tax on that income.
Do not confuse the lack of a child support tax with a similar issue; spousal support. Which is indeed taxable. These two are handled very differently on your end of the year returns therefore make sure that you clearly understand the difference and what it is you need to do to stay in good standing with the IRS.
Also remember that just because there is no child support tax does not mean that receiving child support doesn't apply to any low income services that you may be receiving within your state. This is unfortunately a very broad topic that is very much individualized to the state in which you live. Therefore make sure you read all of the documentation that accompanies any services you may sign up for as well as speak to your local case handler to find out whether or not your child support will have an effect on the services you are eligible to receive within your state.