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Kousha Navidar: This is All Of It. I'm Kousha Navidar in for Alison Stewart. Thanks for spending part of your day with us. I'm grateful you're here, especially today. We've got a cool show for you. We'll talk about a new exhibit of portraits of people taken at the Chelsea Hotel over the last couple of decades. We will speak with the director of the documentary, Remembering Gene Wilder. We will talk about some of the best bad movies of all time, and why watching terrible films can be such a gleeful experience. That's the plan, so let's get this started with a little advice in the run-up to Tax Day.

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Kousha Navidar: You've got about one month left to file your taxes. They're due on April 15th this year, but if you haven't started filing yet, don't worry, we're here to help. Lynnette Khalfani-Cox is an author and personal finance expert, and the author of the new book, Bounce Back: The Ultimate Guide to Financial Resilience. She joins me now to walk us through some tax need to knows, especially if you are one of the people hit by layoffs in the last year, or if you spent part of the fiscal year on strike. Lynnette, welcome back to All Of It.

Lynnette Khalfani-Cox: Thank you for having me, Kousha. Great to join you.

Kousha Navidar: Absolutely. Listeners, we have the phones open, ready to take your questions. What questions do you have about filing taxes? Maybe you need some advice about a specific financial situation, Lynnette is here to help, I am here to listen. Give us a call or text us. The number is 212-433-9692. That's 212-433-WNYC or hit us up on social, it's @allofitwnyc. Lynnette, let's get into it. The deadline this year is Monday, April 15th. Generally, who has to file their taxes?

Lynnette Khalfani-Cox: Well, most people who had earned income need to file their taxes, but some people don't. Some people who are on social security might not have to file. You have a different threshold based on your tax status. Of course, your tax status is going to be whether or not you're single, whether you're head of household, whether or not you're married, or married filing single, married filing joint, that kind of thing. Even whether or not you're a student can play a role, and whether or not you have to pay those taxes or file a tax return. The good news is that-- and we're still one month out-- if you are among those who need to file a tax return no need to panic, no need to stress out about it.

Because if you are like, "Oh my gosh, I just don't have my records together," or, "I don't think that I'm going to be able to pull this off by April 15th." You can always get an extension. I tell people, "if you have any questions about whether or not you'll be able to timely file your 1040, your federal income taxes, go ahead and ask for that extension."

It's a Form 4868 that you file, and it gives you an automatic extension through until October 15th. Now, it's an extension to file, but it's not an extension on the tax liability front if you actually owe any taxes. That's a good thing for anybody who's stressed out about it right now.

Kousha Navidar: Do you ever run into a certain category or categories of people who think, "Oh, I don't need to file taxes, they don't apply to me," but they actually do?

Lynnette Khalfani-Cox: Yes, all the time. I don't want to invoke any celebrity names here, but we can think about the list. Listen, sometimes people just get bad advice, unfortunately. Sometimes people have a whole bunch of, let's call them strange ideas about, I don't owe the government this because I'm not declaring my-- I live in a certain area. I have a certain religious belief. I don't believe in supporting where tax dollars are going, et cetera, et cetera, et cetera.

The fact is, the US is one of those countries that taxes you, first of all, on worldwide income. You can go live in another country, but you still have to file your taxes. You might have a foreign earned income exclusion that applies, and it's a pretty hefty one, it's almost to the six-figure level. Generally speaking, if you are a W-2 employee and you're working, and if you are even like an employer, a small business owner, et cetera, yes, you're going to need to file those taxes.

Kousha Navidar: You had mentioned something at the top about filing an extension, but that doesn't necessarily extend to your responsibility. We just got a text about that question. It reads, "Tax question. How easy is it to arrange to pay in installments? Also, my understanding is if you want to defer payment, you still have to pay the estimate, which sort of defeats the purpose of deferring. Is that right?" Two questions in there.

Lynnette Khalfani-Cox: No, I don't think that it's correct that it kind of defeats the purpose. Especially if you're looking at what the IRS assesses in terms of penalties if you don't file, versus penalties if you don't pay. If you don't file, you get hit with a failure to file and a failure to pay penalty, and that's 5% or more of the tax due per month plus interest. That's a pretty hefty tax liability to incur on top of whatever it is that you owe in terms of the principal amount of your tax owed. That's why I always tell people, "Go ahead and file even if you actually still owe." That's one thing.

Also, and when it comes to getting an extension, yes, it's very easy to get an extension online. A lot of people are a little stressed out again about this, but the IRS does actually make it easy for you to enter into an online installment agreement. They'll let you stretch it out depending on the number of months. If you want to knock it out in just a couple of quick months, there's one plan for that. However, if you want to stretch it out over a couple of years, they will also let you do that. You can do that online. There are some requirements, you have to be up to date, you have to owe $50,000 or less in tax liability, et cetera.

I think it's a good option for those who are just afraid. You would be shocked, Kousha, at the number of people who just don't file or don't do anything. They kind of take the ostrich syndrome, they stick their head in the sand and they don't want to talk to the IRS at all. They don't want to find out about their options. The online option is kind of like, "Okay, I don't have to talk to anybody, I can just get this done." Generally speaking, they approve these things fairly readily.

Kousha Navidar: We're talking to Lynnette Khalfani-Cox, who's an author and personal finance expert about taxes. Listeners, if you want to be a part of the conversation, ask questions about that April 15th deadline coming up, text us or call us. You can reach us at 212-433-9692. We're getting a lot of calls right now. Let's go to Bob in Brooklyn. Hi, Bob. Welcome to the show.

Bob: Hi. Thank you for taking the call. Long time, long time. I have a question. I have signed up last year for the unemployment because I saw the governmental problems coming with paying our own bills. There was some snafu where I gave them all my information, but at some point, months later, I got like 14 letters in a row, same day, same letter. From labor that said, "Oh, well, we can't confirm your direct deposit information and we can't tell you any more about that, but you'll have to resubmit your information." I call the helpline. They try and get me to the online account, which is the only place that you can change the information.

That page would never load for me. No one seems to be able to tell me in Department of Labor, is there somewhere I can just go and turn the information in by hand? Is there a special place I can mail it? How can there be only one way to do this? Now, it's gotten to the point where I've gotten a 1099-G from the Department of Labor said, "Oh, we just notified the IRS debt. We paid you about $4,000, never saw a dime." Now, obviously, I can't reach the Department of Labor and I can't reach the IRS because their lines are always jammed.

Kousha Navidar: Bob, thank you so much for that call. Lynnette, what advice would you have for Bob there?

Lynnette Khalfani-Cox: Tricky situation because-- and he's not alone in that, he's run up against not only a technical problem, getting these 14 notices. Not being able to access online, et cetera, but then running into jams with the IRS in terms of the phone lines being busy, so I sympathize with you there. What I would suggest is two things. One is he mentioned a 1099-G. That's the statement that you get if you've been paid unemployment compensation. You do have to pay federal taxes, you can't escape that on unemployment, but then whether or not you owe at the state level. He didn't say, are you in New Jersey, New York, which state are you in?

Kousha Navidar: Oh, Bob, are you there right now?

Bob: Indeed, I am.

Kousha Navidar: Okay.

Bob: I'm a resident of Brooklyn, New York, and unfortunately, this is the second time this has happened. The first time it happened was with New York City, and now I do volunteering as a poll worker.

Kousha Navidar: Resident of Brooklyn.

Lynnette Khalfani-Cox: I was going to ask because if he happens to live in New Jersey, New Jersey is one of those states that doesn't impose taxes on your unemployment compensation. Yes, New York, you're going to need to do that. If I understand your question, you want to know, is there a physical address or place on the federal side, Bob, or on the state side where you can to handle this?

Kousha Navidar: We lost Bob, unfortunately, so let's talk more generally. What would you suggest if you were looking for federal?

Lynnette Khalfani-Cox: The Department of Labor is the organization that would be the entity that would handle this. What I would suggest is I would do a quick Google search. I would see whether or not there are any local offices or any kind of either tax sites through, say, AARP has their affiliations and alliance with VITA, which is the Volunteer Income Tax Association or organization. Some of those may be able to help as well. Generally speaking, it sounds like if he's not able to do anything online, he's not able to get anybody on the phone. The physical in-person route may be the option.

Another option, though, is just an IRS office itself. Your team knows. I used to live in New Jersey, but I recently moved to Texas now. I'm in the Greater Houston area. However, there are local IRS offices as well. Just do a quick search. Where I lived, there happened to be one right there in Mountainside, New Jersey where I lived. Do a search and see if there's a physical IRS office as well that you might be able to get into. They do require typically an appointment, but that might be a better route.

Kousha Navidar: Thank you so much, Bob, for that call. Let's go to Janet from Brooklyn. Hi, Janet. Welcome to the show.

Janet: Thank you. I have a friend who hasn't paid taxes in years. She gave information to a accountant who died. What should she do?

Kousha Navidar: Thank you so much, Janet. Lynette, what do you think?

Lynnette Khalfani-Cox: I'm not sure if she gave electronic or physical copies of her tax information. Step one is absolutely to try to retrieve the information. When my husband-- both of his parents passed away, unfortunately, his mom passed in 2018, his dad passed in 2021. Long story short, the will was at a law office of someone who had also passed away. Fortunately, we were able to retrieve the documents because someone still worked there at the office.

What I would suggest is with this accountant, I don't know if it was part of a practice, if he had a longtime assistant or somebody else. By all means, try to get those physical records if those were turned over because those might be the only ones that they have for some records. The other thing is anything that they had digital, just try to duplicate and get copies or to create copies of that. Then you want to turn those over to whomever, CPA accountant, volunteer tax person, et cetera, that you're going to get to handle that for you for the friend.

Kousha Navidar: First of all, Janet, thank you so much for that call. It actually leads to another question we're getting a lot of texts about, "I have not filed taxes in years. What do I do?"

Lynnette Khalfani-Cox: You catch up. I know it's a scary thing, and a lot of people they're put off by either fear of the IRS, fear of owing, fear of complexity, a lot of fears basically, a lot of worries. Honestly, the worrying and the stress is still going to sit with you and be with you. It's only compounding the problem way better. I have a friend, Tiffany "The Budgetnista" Aliche who says, "Clarity is kindness." When you are clear with others about your boundaries, and when you're clear with yourself when you have insights, you're actually being kinder to yourself.

To face the truth is being kind to yourself. I would suggest that. For those who are certainly, just stressed out about like, "This is just way too much work," or they're thinking, "I don't want to pay a lot," that kind of thing. Tools, technology can absolutely help you on this front. There's a great app that I know of called mocrefund, online site as well, mocrefund.com. They are using AI-powered technology to help people to do their taxes.

Basically, it gets done in 10 minutes. It takes your W-2, and you upload it, you scan your ID to verify your identification, and it does the thing behind you to do that. Again, we've been so conditioned, in other words, crucial to think like, "Oh my God, it's going to take so long. Taxes are going to be forever." Well, maybe not, if you use some technology also. Just a couple of options there.

Kousha Navidar: You're mentioning the fear, which I think is quite valid. Let's say you go to the IRS, and you have not filed taxes in a long time. Will they give you a break? Are they just going to throw the book at you? Will there be somebody that can help you out through your situation? Is there any way to alleviate that fear for folks?

Lynnette Khalfani-Cox: There is. First, not only might you be able to get into an installment agreement if there's money owed, but the IRS actually does have some programs to give certain people a fresh start. If you are technically bankrupt, even though you haven't officially filed for bankruptcy. If it would cost the IRS essentially more in resources to try to pursue you and come after you and hound you for a debt that you really just don't have the economic capability to repay. You might be able to do an offer in compromise and get a huge portion of your tax liability reduced.

I always tell people, even though I know it's hard to take that first step, but to gird yourself, get some support if you need, and face the music because step one is just addressing the problem. Trust me, every single person I know, for 20-plus years I've been doing this and talking about personal finances and taxes. After they tackle the problem, they're like, "Oh my God. Oh, I'm so relieved. I wish I had done that a long time ago," because it was just a burden. It was just like an anvil hanging over their head. Then when it's done, it's done. That would really be my advice.

Kousha Navidar: That's very motivational. Let's go to another caller, Robert in Brooklyn. Hi, Robert.

Robert: Hi, how are you doing?

Kousha Navidar: Wonderful. Thanks. What's your question?

Robert: Hey, thank you for taking my call. Quick question. I was laid off three weeks ago. They gave me severance pay of six weeks, but they're paying it out. They pay biweekly, so every two weeks I get a paycheck. I know you're not looking at the agreement but just based on my words. The agreement says that they're going to pay me three regular paychecks, each consisting of two weeks. They're claiming that that is considered supplemental wages to be taxed at a higher rate.

I look at it as they're paying me regular wages. Even though I'm not working, the agreement is that they're paying me three-- they're not paying it in bulk. They're paying it as regular pay periods on pay dates, three consecutive, each covering two weeks, a total of six weeks. Now it's a back-and-forth between me and them on their withholding taxes on a much higher rate than I believe, and I don't know what the correct view on it is. Is it regular wages or supplemental?

Lynnette Khalfani-Cox: Great question and the honest answer is I don't know. I truly do not know, so I'm not going to even hazard a guess. That's absolutely a question for an accountant CPA, somebody with more expertise than I have because I don't know. However, I will tell you this, just to make your case to your employer. You said that you were laid off a couple of weeks ago, and they gave you this six-week package, or the payouts are going to come. Were those funds exclusively severance, or was that anything based on what you had built up like you had sick pay or vacation pay that they hadn't paid out yet or anything like that?

Robert: Exclusive severance, but nothing that I have accrued.

Lynnette Khalfani-Cox: Nothing accrued, okay. Because I was going to say that would put you more in the camp to support your argument. I would take that to a tax professional, and obviously tell them the state that you're in. That's going to require a little more digging, and I wouldn't want to give you misinformation.

Kousha Navidar: Robert, thank you so much for that call, and it touches on a theme that we're all thinking about right now. Robert, I'm sorry to hear that you were laid off, we're wishing you the best. Lynnette, for folks who are receiving severance or folks who might have been laid off. What are important things they should think about, maybe if they're filing taxes for last year or if it like Robert was just a couple weeks ago and they're trying to plan?

Lynnette Khalfani-Cox: Again, if you are recently laid off or even if it's been a year ago, sorry for you to have to go through that. I talk about bouncing back from layoff in my latest book, that Kousha mentioned, because it's tough. It's one of those things where you get dealt an economic blow and an emotional blow. Again, I know what it's like because I was laid off 20 years ago from my job as a Wall Street Journal reporter for CNBC. First thing I would say is, you have to take care of believe it or not, some of the softer side of things.

People don't like to hear this, but in terms of your mental health, in terms of establishing connections. Taking care of yourself physically because sometimes people might slip into depression or have anxiety, "Oh, when am I going to be able to get a new job? I need to replace my income." That forces them to make poor financial choices. I tell people, we know that based on research, Daniel Kahneman, Nobel Prize-winning economist show that 80% of all financial decisions are emotional.

Take care of your emotional and mental health, your personal side, then you'll be better suited to make good financial decisions. You are going to want to rejigger the budget if you've been laid off recently and haven't had an income stream. You are going to want to think about other ways to generate cash flow. You might sell stuff, things you don't want, need, or use anymore. You're going to want to make sure that you are taking every credit and deduction to which you are entitled. Because you have a lower income, you might qualify for some credits, like the earned income tax credit, for example.

Kousha Navidar: We're looking at the clock, we're just like the 15 or so seconds we have left. Any final words for folks who are looking at the April 15th deadline?

Lynnette Khalfani-Cox: I would say don't stress, take a deep breath. Understand that you do have time, you have about a month or so. If you feel like you can't do it, go ahead and file that Form 4868, it will give you some breathing room.

Kousha Navidar: Lynnette Khalfani-Cox, is author and personal finance expert, and author of the new book, Bounce Back: The Ultimate Guide to Financial Resilience. Lynnette, thank you so much.

Lynnette Khalfani-Cox: Thank you for having me.