Out of House or Job? What You'll Need to File Your Taxes

COLUMBUS, GA (WTVM) - Record job and home declines means business is going in the opposite direction for tax preparers.

But, before consumers rush to file in hopes of making some money, there are some important steps to take.

For example, if they've had a foreclosure, they'll need a specific form from their lender.

"A 1099 is cancellation of debt," explains H & R Block Community Relations Manager Sonja Giles.

The form shows the amount a homeowner owes the bank, which is actually considered taxable income.  But a law enacted in 2007 allows it to be forgiven.

Taxpayers simply need the proper paperwork from their mortgage lender when they file, or the mistake could be costly.

"A lot of people that may have been in a position to get a refund this year will not, end up owing because of this 1099-C," says Giles.

By law, lenders are supposed to send out the form out by February 2nd.  Giles says taxpayers who filed without it, can file an amendment, but that too can be a hassle.

In addition to folks who've lost their homes, taxpayers who've lost a job will need certain documentation too.

"They need their 1099-G," says Giles.  It shows taxes paid and unemployment collected throughout the year.  And tax preparers say don't forget to deduct expenses incurred while searching for a job

"This would cover the cost of producing resumes, mailing them out, travel expenses, to go for the job interviews, those type of things," adds H & R Block Master Tax Advisor Gayle Oneal.

Click here for more information and tax tips if you've suffered some financial hardships this year.