Robert J. Fedor, Esq., L.L.C.

Major life events often yield tax considerations

Major life events such as loosing a job or retiring often force individuals to reflect upon many matters. Such life-changing events often provide for a time of reflection and can bring about a major shift in how an individual chooses to life their life. While considerations related to finances, living arrangements and dependants may top the list; few individuals facing these situations think about the tax implications and impact.

Individuals who fail to pay taxes are often found guilty of tax crimes including tax evasion. Even well-intentioned individuals can unknowingly get into tax trouble when life-altering events occur. Take for example a job loss. Thankfully when a job loss occurs, most individuals are entitled to receive unemployment benefits. While an essential financial safety net, monies awarded via unemployment benefits are often fraction of those previously earned. Adding insult to injury, many individuals who receive unemployment are also shocked to learn that they are required to pay income taxes on monies awarded via unemployment benefits.

Another major life change for which individuals often fail to take taxes into consideration involves retiring. Many individuals of retirement age can likely remember back to their first paying job. From the very first paycheck, working individuals pay into social security. Upon reaching retirement age, many such individuals look forward to finally receiving a chunk of that change back through monthly social security benefits. In some cases, however, social security is considered taxable income.

Individuals who fail to pay taxes on income may be found guilty of tax evasion. If determined guilty, such individuals are often subject to hefty fines and could potentially spend time in prison. Individuals who are facing tax crimes would be wise to take such charges seriously and retain an attorney.

Source: Bankrate.com, "Beware these 5 terrible tax surprises," Kay Bell,