Foreclosure and Loan Modification Blog

It's Time To Get Your Taxes Done (And Save Your Home)

[fa icon="clock-o"] Sunday, April 1, 2018 [fa icon="user"] Maxwell Swinney [fa icon="folder-open'] loan modification, bank of america foreclosure, income tax

Federal income taxes are due April 18, 2017. Submitting your taxes on time, and using the refund in the best way can help you achieve your financial goals.Ben Franklin said the only two certainties in life are death and taxes. Certain to happen, sure, but when? Death row inmates aside, we don't know when we'll die. But the day our income taxes are due is known. Normally it's April 15. That's a Sunday this year, so the government has set Monday April 17 as the deadline to file income tax returns.

You have to file income taxes with the federal government every year unless you meet the requirements to be exempt. If you owe money to the IRS and don't pay, they will charge you interest and even pursue criminal charges. Just ask Wesley Snipes, he went to prison for two and a half years over tax issues. 

You can file your income taxes for free online or by mailing paper forms to the IRS yourself. Many people choose to have a professional prepare their taxes for the assurance that it's done correctly and that they get all the deductions they are entitled to. 

Filing Extension

Federal income taxes are due April 18, 2017. Submitting your taxes on time, and using the refund in the best way can help you achieve your financial goals.If you're not going to be able to have your taxes filed by the required deadline you can get an extension to file by completing IRS form 4868. It can be completed online or by mail, and it's free. Click here to go to the IRS's web page that provides more information on extensions.

Keep in mind that getting an extension to file your taxes does not give you an extension on paying the taxes you owe to the government. If you owe any money to the IRS, it's still due April 18. Form 4868 states “If you don't pay the amount due by the regular due date, you'll owe interest,” and recommends estimating how much you owe and paying it when you file your extension.

Spending an Income Tax Refund

According to IRS data, 80% of American tax filers each year get a refund for an average amount of $2,800. If you get a refund, the smart thing to do would be to invest it in scratch-off tickets or bet it all on one horse at the track. That's how you make your money work for you. No, don't do that. What you should do depends on what your financial issues are.

If your biggest problem is some high interest credit card debt, it would make sense to pay some of that down with your refund. If you need to start saving for retirement or for a rainy day fund, you could use your refund to get a start on that.

Mortgage Problems

If you're having problems with your mortgage, like you haven't paid it in months or years, a tax refund check could help you get back on track, though not in the way you might think.

If you're more than three months behind on your mortgage, your mortgage company doesn't want you to start making monthly payments again. They want a check for all the missed payments plus fees before they'll accept payments like normal. Depending on how far behind you are, even a very large refund may not be enough to do that.

To get your loan reinstated when you don't have the cash to do so, you'll want to pursue a loan modification, which involves returning the loan to normal servicing and making a permanent change to one or more of its terms.

Applicants for a loan modification are required to submit a thorough package called a request for mortgage assistance (RMA) that includes a copy of their most recent income taxes. That's all the more reason to get your taxes done.

Loan modifications are difficult to obtain, and homeowners who apply on their own frequently complain about the difficulty of the process, which often includes sending in the same documents multiple times, being denied, and the anxiety caused by not knowing if they will lose their home to foreclosure. If successful, though, loan modifications can make a mortgage better than it was before, with a lower monthly payment and principal balance.

A qualified attorney with knowledge of loan modifications can give you better odds of getting approved for the best deal. They ought to know what the bank needs to see to get you approved. So, depending on your circumstances, using some of your tax refund to retain an experienced foreclosure defense attorney could be the best way to keep your home through a loan modification.

If you don't want to keep your home, an attorney could still help you by keeping you out of foreclosure for as long as possible and negotiating a short sale or deed in lieu of foreclosure agreement with your lender. Before giving money to anyone make sure they charge a fair rate for their services, have experience with what you need them to do, and can prove their record. Reputable attorneys should be able to show you successful case results for past clients in your situation.

((This article has been updated in April 2018))


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Maxwell Swinney

Written by Maxwell Swinney

About this Blog

Amerihope Alliance Legal Services is a leading loan modification and foreclosure defense law firm with attorneys licensed in 5 states. We have helped over 7,000 homeowners fight back and keep their homes.

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Our goal is to provide valuable information to help homeowners who are trying to obtain a loan modification or to stop foreclosure. You may schedule a free consultation at any time.

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